BPO is inadvertently the hottest thing that ever happened to the Indian economy. It’s even hotter than The Y2K that created hundreds of thousands of jobs especially for software engineers. BPO have opened the doors widely to whoever can speak English or imitate English in a ’Propah’ accent. The popularity of BPO could be gauzed from the fact that I have myself sat through more than five presentations on BPO during my MBA.

BPO started out in India with medical transcription where one needed only to understand the American and British English accent and not even talk it. Slightly higher end BPO followed in the form of call centers wherein one was needed to be able to talk English in the propah English or American accent.

Even higher end jobs followed in the form of payroll processing, HR functions to legal advices and even drafting for architecture firms abroad and MBA and CAs crunching Financial Data’s for Equity research firms, data analysis and what not. The last presentation I attended had a brief mention of a Mumbai based BPO outfit that analyzes high-end data from petroleum refinery that employs only PhDs.

Even Surgery and radiology are BPOed. But highly skilled or unskilled, the fact remains that all these jobs are meant for the cheaper labour. And India being a developing country has cheap labour in abundance.

But the Question is, how long can India sustain this labour-cost advantage? The same jobs that this advantage have created has made the living standards in India visibly higher than it use to be a few years back which can seen from the growing number of multiplexes, shopping malls and MNC fast food chains.

The BPO as an industry have contributed immensely to the Indian economy and will continue to do so for some years to come. Added to this we are seeing significant developments in other sectors of the economy as well. IT sector as a whole in on an ever growing growth path. Majors IT MNCs continue to expand their existing Indian operations and those which didn’t exists before are entering in hordes.

The infrastructure will significantly improve once the golden quadrilateral in completed. And all these will drive the Indian economy on a faster growth path. In a developed India, will the labour-cost advantage remain? With more development,.living cost will increase… the current inflation could as well be a manifestation of all this.

In such a scenario, Lesser-developed countries like Vietnam and perpetually cheap labour country like China will continue to offer cheaper costs and if India has one one of the world’s largest English speaking population…China is also learning ENGLISH so is Vietnam and speaking english is not rocket science..

And the Chinese could have learnt it even if it were rocket science. Just as India is moving up the value chain in the Outsourcing game so are the Chinese and the vietnamese. And they are doing it very effectively. So saying that the Chinese and the Vietnamese doesn’t pose a big threat to the Indian BPO sector would be an understatement, or it could be like whistling when you are walking down a dark road consoling yourself there is no one out there.

Another problem in BPO is choosing it as a career because of the limited growth it has to offer as a career. People look to BPO not as a career but as a transition job one takes up before moving on to greener pastures or an MBA.

It is because BPO companies doesn’t offer much growth and it’s much a monotonous job and as such its very difficult for one to look at BPO as a long term career option. The heavy toll that the 24/7 work culture of the BPO on the health and psych of BPO executives has been another major problem that have attracted much attention and which have started to manifest in the form of the high attrition rate of 30% + and growing, in the BPO industry.

So, is BPO a really viable driver of the Indian economy? Before putting a large chunk of our eggs in the BPO basket, it would be only wiser to look for other baskets as well.