BPO now enters Rural India for competitiveness

The spectacular growth of the Information Technology (IT) and Information Technology Enabled Services (ITES) after the nineties has proved to be a boon for the Indian economy. In metros and urban areas, the IT sector created exciting employment opportunities for fresh young graduates in well-paid jobs.

What triggered this development was the rapid process of globalization, especially after the collapse of the Soviet Union and the end of the Cold War in 1990. Businesses in developed countries like the United States discovered that they can survive only by outsourcing part of their business manufacturing and services to developing countries like India. By doing so they could profit from the cost effective skilled professionals in these countries. Business Process Outsourcing (BPO) was given a fillip, thanks to the break through in telecommunication which reduced the world to a global village.

While the youth in metros and urban areas benefited from the BPO boom, those in small towns and rural areas were left out. There was an increasing political clamor about the growing disparities in income and development between urban and rural India. This urban rural divide came in handy during the elections when some chief ministers focused on promoting IT in their states. But unfortunately, they faced defeat. Chief ministers like Chandrababu Naidu in Andhra Pradesh and S M Krishna in Karnataka in India who led the IT thrust became martyrs for IT in the 2004 elections. The populist leaders who replaced them, while not openly opposing IT, talked about the common man and rural development.

By a curious twist, it seems there is a second wave in BPO and ITES emerging, which must be music to the ears of such populist leaders. As a part of their corporate social responsibility initiatives, companies like Satyam Computers have adopted some villages. They are using IT to provide better services in the areas of education, health, access to information like market prices of agricultural commodities as well as employment to the rural youth. They have also discovered that some of the BPO contracts can be sub-contracted purely as a business proposition to the rural areas. An urban based Indian company may pay an employee Rs40,000 per month. But without sacrificing on quality or time, the same work could be done in rural areas and Tier Two cities at Rs15,000. More over this is getting possible because of extensive network connectivity.

The graduates of engineering colleges in rural areas who were not getting jobs, can be trained to competently perform simpler BPO jobs. In many places in South India where the jobs were due to exports to U.S the rural youth are now jobless because of drastic cuts in exports. Here the BPO sector is to their rescue and the rural youngsters are already performing competently in the BPO sector.

Managements of IT industries find that outsourcing their work to the rural areas and Two Tier cities not only yields better profits without sacrificing quality, but also reduces their headache in human resource management. This second wave of BPO where urban India is like the United States and rural India is like the developing countries of the nineties offers excellent opportunities for employment generation and promoting equitable inclusive growth. The tragedy is that the main IT industries and entrepreneurs do not seem to have realized this new potential extensively. The benefits are numerous. Employment will be created for the rural youth with minimum monthly income of Rs5,000. This will in turn trigger growth and employment in the secondary and tertiary sectors.

What is needed is a conscious organized thrust for outsourcing BPO by the Central and state governments, the IT industry as well as by entrepreneurs.

The strategic alliance between the Central government and the industry in the nineties was able to exploit the first wave of IT and ITES. The second wave can now be imaginatively exploited by the BPO, IT and ITeS companies.

  • Hari Om and thanks for posting!

  • Smithadam220

    The major constraints for building up such rural level BPO settings lay in creating infrastructure, prospects of scaling business growth above a certain hierarchy, funding requirements for the start-ups involved and pooling together the requisite talent from the nearby villages and towns as well as convincing them about the rural job opportunities as against shifting to bigger tier cities with higher pay potential.

    Rural areas in India are plagued with lack of basic infrastructural amenities such as lack of high-speed broadband connectivity. In fact, a majority of the rural areas faces the hindrance of power connection and frequent black-outs for a large portion of the day.

    If the above grass roots problems are addressed to a larger scale, the IT-enabled service sector has in itself the potential to bridge the employment gap existing in the rural areas while providing low-cost solutions to the urban and overseas clients. In fact, tapping rural workforce at local levels would also mean controlling overall attrition levels in the industry defined by talent crunch.

    But the fact is that India has won its spurs as the world’s outsourcing destination of choice. Currently the country has a commanding share of the global outsourcing market.
    So it looks like there is real expansion in the sector.