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Indian outsourcing head says back-end IT jobs returning to UK

More Indian companies moving into higher value consulting and software integration services and away from lower value back-end functions

More entry level software development jobs and apprenticeships will come back to the UK from India as a result of that country "scaling up" its IT services and software integration sectors.

At a software innovation event hosted by SAP Labs in India this week, N Krishna Kumar, vice chairman of NASSCOM, India's IT and business process outsourcing organisation, said BPO could now be perceived as a commoditised business sector in India.

As a result, he said, more Indian companies were moving into higher value consulting and software integration services, and away from lower value back-end functions like call centres and simple data processing.

"It's now not about simple offshored tasks western centres don't want to be responsible for," said Kumar. Asked whether the knock-on effect of this move would be more entry-level IT services jobs coming back to the UK after they were offshored to India by UK companies, Kumar said, "There is the possibility of this happening, yes."

Kumar also said the call centres that have sprung up across India over the last 20 years were still there but their headcounts had largely stopped growing, meaning another possible return of entry-level jobs to the UK and other western countries.

Kumar added that the same Indian-owned BPO firms that had taken away UK jobs since the 1990s were also expanding overseas to be closer to the markets they serve, including in the higher growth areas like mobile, cloud and Big Data and analytics.

NASSCOM estimates the Indian IT/BPO industry is worth around $100 billion a year and is looking to double this to $200 billion by 2020. Despite competition from China and other lower wage economies, Kumar said that India would still continue to grow its share of the market. He said, "The global IT services and BPO market is worth around $1.6 trillion a year. We have $100 billion so there is plenty of headroom for us. Also, wage inflation in China has been three times higher than ours in recent years."

The fact that English is widely spoken in India was also a major factor in the potential of India staving off the competition from China, said Kumar.

That said, the country's National Entrepreneurship Network (NEN) admits to a shortage of investment angels and venture capitalists operating in the country to drive high growth technology areas.

K Srikrishna from NEN said: "If you listen to the English media in India you'd think we already had Silicon Valley here, but that probably won't happen for another 20 years."

He said that Indian angel investors had only invested around $20 million in 2011, compared to the annual $390 million investment in Canada and the mammoth $20 billion annual investment in the US.

Srikrishna said that the problem wasn't a lack of cash, but the lack of an investment angel ecosystem that would see the right skills and mentoring provided to start-ups.


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