Thursday, August 02, 2007

New IT destinations

India doesnt seem to be a good destination for IT and BPO services now. I always believed that Eastern Europe is a very good place for IT and BPO. They have the brains and quality. Estonia is a surprise.

IT may survive this, since wages in IT are lower than BPO (yes.. surprisingly, I have met many young BPO employees who earn a lot more than software engineers. Till some time ago, they even got more salaries at entry level than the IT guys.. ), but BPO may take a hit. No, existing companies will definitely not close down (they are still quite efficient with their business and finances. Quality? Well thats another matter), but they sure will downsize/merge/slow down the growth, and new startups will be harder to come by.

The appreciation of the Rupee, plus rising wages have played their part. All this is the effect of high inflation sometime in 2006-early2007. One mistake by our "esteemed" Finance Minister, P Chidambaram (Hey Harvard univ people, arent you ashamed of him? But then you are not to blame really, if one of your students is dumb), and it is still having major repercussions on the economy. BTW, the major reason for inflation was not the Rupee value or Interest rates(though they played a role). It was shortage of foodgrains in the markets.


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