Why China for Outsourcing
How China is challenging India's dominance in software outsourcing
In recent years, India has dominated a global offshore IT services outsourcing boom that industry research firm IDC predicts will grow to $29.4 billion USD in worldwide customer spending by 2010. However, while India produces 215,000 engineering, computer science and information technology (IT) graduates per year, the country's technological primacy is in question. India is challenged by the limited availability of high-quality college education, a lack of modern infrastructure, and a state bureaucracy whose electoral base is primarily rural and agricultural. Beyond Bangalore, especially in tier two and tier three cities, India faces massive problems in terms of poverty and literacy that will continue to distract the government away from developing the infrastructure required to meet IT industry demands.
China, by contrast, offers a combination of a dispersed, highly literate population, better educational systems in both major urban centers and tier two and tier three cities, and a functional, fast growing infrastructure. The Chinese government has established a commitment to building high-quality technical universities throughout the country, often in tier two and tier three cities. China leads both India and the United States combined in the number of engineering, computer science, and IT degrees it awards, with more than 640,000 graduates in 2004.
Unlike India, China's growing infrastructure is naturally dispersed. India's educated middle and upper classes are concentrated in large urban areas like Bangalore and Delhi. China's educated population, on the other hand, can be found in small, medium, and large cities across its vast landscape. These tier two and tier three cities typically have well-established road structures, airports and utilities. Moreover, an ongoing inflow of foreign capital is driving the development of China's infrastructure to support manufacturing and its fast growing services sector. Foreign businesses are finding dependable power and other utilities, high-speed data connections and modern networks already in place.
With its combination of a dispersed, highly literate population, better educational systems in both major urban centers and tier two and tier three cities, and a functional, fast growing infrastructure, China is poised to dominate global software development and IT services business. Innovative companies like Achievo are seizing this opportunity, leveraging the advantages of doing business in China by recruiting employees with the greatest potential, and motivating them to make a difference in the global economy through ongoing employee education programs, a culture that builds teamwork and commitment, and a business model that fosters a global perspective.
All signs point east: Why China is optimized to win the IT services race
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