Wipro chairman Azim Premji has said that Indian BPO companies may have to shift to higher end services as Bangladesh and Pakistan could pose a threat due to their lower cost structure.
"With the advent of other low-cost countries like China, and possibly Bangladesh and Pakistan in the future, short-term opportunities in the BPO space are likely to disappear and there will be pressure to graduate to higher-end services," Premji said while delivering the JRD Tata Memorial lecture in New Delhi.
Temporary arbitrage opportunities were the reason for the emergence and growth of the Indian software industry. The short-term nature of these business prospects made it imperative for the industry to go up the value-chain, said Premji.
According to Premji, companies like IBM, Microsoft and General Electric have been built by leveraging medium-term technological possibilities and Indian companies should follow suit by using the talent pool of engineers and technical personnel.
About 350,000 engineers graduate in India every year along side 150,000 diploma holders. This is about five times the number in the United States. These could itself be the biggest strength of India in the future, driving growth in the long term.
Unlike the western world, India, which will have most of its people in the working age group, should use this to its advantage through right policy initiatives.