A recent article at Forbes titled “The Coming Death Of Indian Outsourcing” reads:
Information technology and IT-enabled services will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India’s foreign-exchange inflows, according to Nasscom, an Indian IT industry organization.
The death of this industry is far from anyoneâ€™s mind.
However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.
Well, the SaaS trend plays against Indian outsourcing as well. The cost advantage will disappear pretty soon. That’s where innovation can rescue India’s economical chain.