NASSCOM seeks concerted action to encash on ESO opportunity

Bangalore, Aug 4 (UNI) The emerging Engineering Services Outsourcing (ESO), which offered a potential 40 billion Dollar export revenue by 2020, can be a ''missed opportunity for India and a part of another country's boom'' if concerted plans are not taken up by Government, Industry and academia, a NASSCOM-Booz Allen Hamilton study cautioned today.

The study unveiled at the NASSCOM-Engineering Services Summit held here today, said ''Without serious investments in education and physical plants, and an unprecedented campaign that joins business and government leaders to meet these demands, ESO could be a missed opportunity for India and part of another country's boom.'' It revealed that India could easily lap up 40 to 50 billion US Dollars of ESO global revenue by 2020 with the global ESO revenue crossing one trillion Dollars from the present 746 billion Dollars.

From the current spending, only 10 to 15 billion Dollars worth of ESO was offshored with India having a share of around 12 per cent.

Other major players in the sector were Canada, China, Mexico and East Europe.

The study said ''achieving more than a moderate degree of success in ESO will require a serious commitment from India's business and political leadership to make it a more attractive business destination.

To capitalise on its opportunity, India must equip five to seven cities with world-class infrastructure over the next 14 years.

Currently, Bangalore alone had a software export of six billion Dollars with Chennai, Mumbai and Hyderabad combined polling another six billion Dollars.

The study said India must expand its opportunities for engineering education and market itself in a systematic way to let corporate decision-makers around the world know that Indian engineers could do much more than code.

It said ''even allowing for a healthy growth rate of four per cent a year in the number of graduates, the projected number of engineers with the right specialised skills will not be nearly enough to meet the potential demand. Second, India's weak engineering and physical infrastructure is likely to hamper growth as well.'' As opposed to ITO/BPO, ESO had close links with manufacturing and it might be difficult for India to succeed without significantly enhancing manufacturing capabilities, it said, adding that it could not be easily accomplished given the infrastructural constraints.

The study said ITO/BPO success had been driven by companies investing in almost 'stand alone' facilities to de-risk themselves.

However, this would not work with manufacturing.

''To capture its full potential share of this new business, India needs to take steps to address the gaps. While the infrastructure improvements that India must take are nothing out of the ordinary for an emerging market, they will require attention and commitment from all involved parties,'' it observed.

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