MSG Team's other articles

10817 Pros and Cons of Opportunity Zones in America

President Trump introduced one of the biggest tax reforms that the United States has ever seen in Dec 2017. As soon as the plan declared that the taxes on the rich will be reduced by $1.5 trillion, a huge debate started about the morality and the perceived economic benefits of such a move. However, it […]

9512 Hammer and Champy’s View on Process

After the Japanese wave of business process management came the concept of Business Process Re-engineering which rocked the world of BPM. The idea of BPM and the resultant benefits have been mentioned below: What about Those Companies That Did Not Change As said earlier, the Japanese companies were able to understand the dimension of time […]

11253 Internal Technology Framework: 7S Framework

Introduction In the modern age of cutting-edge technology and continuous innovation, product life cycle is ever shortening. There is constant pressure on companies to differentiate from competition and earn customer satisfaction. In such a business environment, it is essential that internal organization network is strong and efficient to deal with any kind of changes. The […]

9426 The Future of Work

Abstract The world of work is changing as we speak and the winners and losers in the workplace of the present are those who can adapt and thrive in this paradigm without being lost in the maze of complexity and chaotic work arraignments. Unlike the baby boomers and those before them, the Millennial generation cannot […]

8983 Disaster Recovery, Crisis Management Plans and Ownership

When and if a disaster strikes any business operation or organization, what helps the Organization to deal with the crisis effectively, continue to run the business operations to the extent possible and get back on the recovery path are the Disaster Recovery and Business Continuity plans. However the effectiveness of the plans depends largely upon […]

Search with tags

  • No tags available.

The main drivers of the BPO phenomenon are globalization, economics and geopolitics. To elucidate, ever since the global economy started getting more integrated and interconnected, there has been a concomitant movement towards opening up of the economies of the developing countries to greater interaction with the west. This “flattening of the world economy” has meant that the East was no longer ensconced in protectionist walls but threw open the doors of its economies to companies from the west.

Any developing country that had invested in infrastructure and education could reap the advantages of the opening up of the global economy. This was what happened in the case of the BPO sector where the presence of a large pool of English speaking graduates along with availability of broadband brought on by the huge investments made in the Telecom and Software sector during the dotcom boom were leveraged by companies to communicate and plug into the economies of the west.

The second driver of the BPO phenomenon is the economic aspect where the efficiencies brought about due to the economies of scale and the theory of comparative advantage which stated that countries benefit by exporting goods and services when they are cheaper to be made in the home country and benefit by importing goods and services from countries where they are cheap. This mutually beneficial trade between the west and east gave rise to the emergence of the software and the BPO sectors that capitalized on the wage differential and the advantage of low cost production to successfully harness the power of technology and communication.

The third driver of the BPO phenomenon is the geopolitical aspect where the countries in the West encouraged greater interaction and cooperation with the countries in the East as means of facilitating world trade and increasing globalization.

The point here is that it made economic and political sense apart from greater international cooperation leading to gains to all countries to encourage the technology and BPO sectors.

Further, the three drivers that we have discussed are intertwined and interlinked where each feeds on the other leading to greater synergies between them. Indeed, they have created conditions for the emergence of booming BPO sectors in Asia thanks to this “triple convergence”.

Finally, the BPO phenomenon has also been driven by demographics as the populations in the West age and at the same time, the populations in the East are youthful leading to a comparative advantage in tapping the huge pool of skilled workers in countries like India. Hence, though the ongoing global economic recession has undermined some of the gains, the BPO sector is still thriving because of the confluence of these factors.

In conclusion, while one cannot prognosticate as to the future of the BPO sector a decade from now, for the time being the economies of the west and the east are conjoined and this is indeed a positive development from the perspective of the drivers of the sector as discussed above.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

Challenges Faced by BPO Firms in India

MSG Team

Effect of Domestic Politics on Business Process Outsourcing (BPO)

MSG Team

What is Business Process Outsourcing? – Meaning and Important Concepts

MSG Team