Move up the value chain in KPO, IT industry

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Bangalore, Oct 29: Union IT Secretary Jainder Singh today called on export-focused software industry to cut costs and move up the value chain to combat the effects of the rising Rupee against the Dollar.

Delivering the keynote address at the four-day 'Bangalore 2007', the Asia's biggest ICT event which began at Bangalore International Exhibition Centre here, he said the increasing value of the Rupee against the Dollar, constant wage hikes and spurt in real estate costs had put the IT industry under severe pressure.

Moving up the value chain, like adapting KPO industry on a big scale and moving over to tier-II and tier-II cities, would be the key for the industry maintain high momentum of growth rate, he said.

He said IT and ITeS sector was the one, which see very fast change in technological environment, and the problems faced by the industry was not easy to solve. The rupee had appreciated by 12 per cent against the Dollar since January and it had remained the biggest concern. "This has put lot pressure on the IT companies and now it is the time to take some drastic steps," he said.

He appreciated the growth made by Karnataka in the IT sector and said there was a need to set up dedicated IT knowledge cities in the lines of the one that would come up near Bidadi near Bangalore, while smaller cities like Mysore and Mangalore had done extremely well in complimenting Bangalore in IT exports.

Mr Singh said with the availability of superior mind power, India should make better use of sectors like knowledge process outsourcing (KPO) that can prove a good alternative to leverage higher profits for the IT sector. The other important thing would be to depend less on the US market, which had led to fall in the profitability.

"We have been over reliant on the US market and this has to change. We need to take up these measures to achieve the target of 60 billion dollars in IT exports by 2010 as targeted by NASSCOM," he said.

Mr Singh said the Bangalore, which was being held for the tenth year in succession, had been a big success. Over 1000 delegates from 23 countries, 17 states and over 200 top companies participating in the event this year would provide an ideal platform for the IT and ITeS sector. Mr Singh said the 'not so satisfactory' quality of IT engineers passing out of the Indian colleges was the other problem faced by the industry. It was good to see that these colleges were doing their big to improve the employability levels of their students and IT finishing schools, first of which had come up in Mysore, can help in improving the standards. Private institutions should be helped to set up more such finishing schools, he felt.

Karnataka Governor Rameshwar Thakur in his inaugural address said in the coming decade Information and Communication Technology would be the driving force of economic growth and a prominent success story of the Indian economy.

The spectacular IT growth story in India had been led by Karnataka, and in particular Bangalore which had become a global brand name and preferred choice of MNCs.

Karnataka IT Secrertary M N Vidyashankar said Bangalore, laveraging Asia' s unique ICT eco system, comprises of exhibition and concurrent conference that showcase the growing importance of Bangalore as the 'ICT gateway to Asia'. Over 200 major companies in different verticles like software and services, telecom, BPO/ITeS , hardware, infrastructure providres and governments were participating in the event.


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