China a threat to India for outsourcing
According to a global research gropup,Though India retains the world’s top outsourcing position, yet it is facing a serious threat from China due to India’s poor infrastructure and rising wages, Frost & Sullivan in their 2006 global outsourcing survey said India was the favourite hub followed by China, Ireland, Singapore, Malaysia, Mexico, the Czech Republic, Poland, the Philippines and Canada. The survey covered approx 300 multinational firms in sectors like : financial services, technology, health care, fast-growing consumer goods, transportation, energy, media and entertainment. During the survey, India scored 2.25, China 1.76 and Ireland 0.77.
"India is faced with increasing threat from China which is emerging fast as an attractive location for information technology, research and development and procurement services," the study said.
Despite churning out 30 lakh graduates each year, there is a wide gap in demand & avialability of experienced professionals in India leading to very high attrition levels of up to 40 per cent, especially in the technology sector, said Aroop Zutshi, the group's president for Asia-Pacific and Europe.
"The attrition rate is creating a big challenge in India. Clearly costs are going up and efficiency is coming down. It's unsustainable," he said.
It predicted the global outsourcing market for the seven sectors would grow at an average of 15 per cent a year, to surge to $1.43 trillion by 2009 as compared to $930 billion the previous year. Financial services and technology accounted for more than half of outsourcing spending last year, and will remain key drivers over the next few years.
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