The Sri Lanka Institute of Chartered Accountants’ annual conference started yesterday. Big do, with 1,100 participants paying LKR 17k+. Perhaps one of the largest gatherings of professionals in Sri Lanka. I was asked to speak on the subject of BPOs and KPOs on a panel this morning. I started with the government’s target of USD 2 billion in export earnings in 2016 from the IT and BPO sector.
The discussion has drawn the attention of some big guns on LBO. Here are the base data given me by ICTA that I used for the calculations. Table 1: IT/BPO Workforce Total BPO IT IT Industry Non-IT Ind/Govt 2010 63,000 13,000 50,000 27,000 23,000 2016 120,000 43,000 77,000 42,000 35,000 Increase 57,000 30,000 27,000 15,000 12,000 Table 2: Average Requirement Per Year IT Professional 5,400 4,500 BPO Professional 6,000 Financial and Accounting 3,500 Legal Services 1,000 Other 1,500
We’re generally in favor of budget business models, but export industries that do not earn enough per employee to pay a decent wage have to be an exception. Here is some analysis I did on the Sri Lanka software export and offshoring BPO industries, based on official figures: The total software earnings of USD 294 million are produced by 27,000 people. That is LKR 99,825 per employee per month. Lower than I expected. On the BPO side, 13,000 people produce USD 98 million.
Starting with a low base, but 62,000 well paying jobs is a great achievement. Sri Lanka’s information and communications technology workforce has doubled in the past four years as the island ramps up training and investment to make the sector a key export industry. A new survey said the number of ICT sector jobs increased by 100 percent to over 62,000 this year from 30,120 in 2006. Over 50,000 people are estimated to have been employed in the IT sector in 2010. The national ITC workforce survey by the state-run Information and Communication Technology Agency covered 80 state institutions, 325 private sector firms, 30 BPO (business processing outsourcing) firms, and 75 IT training institutes.
The AT Kearney Global Services Location Index for 2011 is out. I seem to have missed the 2010 report, so comparing with 2009, which I did do a post on. India is still number 1 and China is number 2. No change. Thailand has slipped to 7 from 4, overtaken by Indonesia.
A news report indicates that lowering leased line prices (described as commercial broadband in the report has risen on the policy agenda in Sri Lanka. This is excellent news, though, of course, I would have preferred a story in the past tense: i.e., “domestic and international leased line prices have been reduced.” Present broadband charges which are higher than competitor countries are deterring foreign ICT and business process outsourcing (BPO) firms from setting up in the island and are partly responsible for poor internet penetration, a report said.
I am sitting in China, writing this. It may be a case of observer bias, but I find the Sri Lankan young people I deal with more nimble in thinking and in command of English than their counterparts here. Yet, according to a ranking by IBM as reported by LBO, China has made a dramatic jump from 13th position in 2009 to 5th position in 2010, while Sri Lanka is holding steady at 12th place. Is this a cause for self-congratulation or self-examination? Is the glass half-full or half-empty?
In 2006, when I expressed skepticism about government claims that Jaffna was getting a fiber optic network in the middle of the war, I was assailed. Unless SLT has built a second cable in 2009, in addition to the one they built in 2006, I was right. This would be the right time for Mr N.P. Perera, or whoever he was, to apologize.
AT Kearny has issued the 2009 Global Services Index. The good news for South Asia is that Sri Lanka has moved up from 29 to 16 and Pakistan from 30 to 20. India, of course, sits at the top, no change from 2007. The advances of Sri Lanka and Pakistan have been at the expense of the Northern European countries (e.g.
Yesterday, I spoke to a large and restive crowd (made so by lack of air conditioning and a delayed start) in Matara (main city in the South of Sri Lanka) at the launch of the Pathfinder Foundation’s first book, a Sinhala translation of Janos Kornai’s Toward a free economy. I was asked to talk about globalization and the relevance of Kornai’s ideas for facing the challenges posed by globalization. In this talk that I pieced together thanks to time zone differences that caused me to wake up at 3 in the morning while in the US, I illustrated the issues referring to Business Process Outsourcing (BPO), a broad area of service exports for which efficient, flexible and low-cost telecom is a pre-condition. I think the talk provides the "big picture" of the necessity of telecom reforms of the type that we at LIRNEasia are involved in. If we are to go beyond simply giving people phones, to giving them "money in the pocket and hope in the heart" this big picture is essential.