American companies will spend more on outsourcing in the last quarter of this year as pent-up demand translates into new orders after the presidential elections, a leading Silicon Valley investor said on Tuesday.
"I think there will be an increase in Q4 spending," Madhavan Rangaswami, managing director Sand Hill Group, which advises on technology trends and invests in start-ups, told a news conference in Bangalore to announce an industry seminar.
Outsourcing to low-cost, high-skill locations like India has become a controversial issue in the US presidential campaign this year, with some legislators and politicians pushing for protectionist measures to curb outsourcing.
But US corporations point to an economic recovery under way and deny fears of job losses.
"Prior to the elections, there will be a lot of hot air but I don't think you'll see a significant change (in spending)," said Rangaswami, who has figured in the Fortune magazine's 'Midas 100 list' of leading private equity investors.
India's software and allied service exports grew 30.5 per cent to $12.5 billion in the year to March, and the industry association expects 30-32 per cent growth in the current year.
Despite the row over jobs, India had only a tiny market share in the US information technology market worth hundreds of billion dollars, Rangaswami said.
Apart from software, back-office services like call centres and accountancy services are fanning high growth in the Indian industry powered by English-speaking knowledge workers who earn a fraction of their counterparts in the US.
