Capacity Building in IT/BPO Sector- A Perspective

August, 2011


In the past two decades, the world has experienced rapid growth in the IT/BPO sector. It touches the lives of millions of people worldwide and is a source of livelihood for many. In recent times, some countries have been able to exploit this sector and transform their econ-omies from a stagnant and depressed state to a vibrant and rapidly growing one. Seizing the opportunities presented by the digital revolution and the rapid growth of the technology services industry is, therefore, one of the most pressing issues facing countries today. Building capacity to harness the benefits from the IT/BPO sector is an essential prerequisite to transform the society and economy of a country. This article focuses on the elements of capacity building in the ITO/BPO sector in order to provide an overview of some of the es-sential building blocks for economic growth in the 21st century.

In a broad sense, capacity building encompasses the development of a country’s human, scientific, technological, organizational, institutional and resource capital in order to meet the requirements and skill sets to compete effectively in a modern global economy. So, what do we mean by capacity building for the IT/BPO sector? Essentially, it is the task of developing the country’s potential to take up IT/BPO as a leading industry sector and develop it to the point where it can become a strategic pillar in the country’s economy.

India, for example (which according to NASSCOM, had IT/BPO industry exports valued at US .7 bil-lion with 2.5 million employed professionals in 2010, USD 49.7 billion employing 2.5 Million professionals) was able to build huge capacity in the IT/BPO space from the mid 1990’s through policy reforms in the telecom sector, thereby enabling investment by both public and private sector players. India primarily relied on tax incentives to build the economic foundation that enabled the development of IT and BPO service providers.