BPO Backlash

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<b>Is India's outsourcing honeymoon over</b>?<i>Report: Labor shortage and wage inflation in outsourcing market has other countries in hot pursuit.</i><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->A new report from market research firm Gartner, Inc. warns that a labor crunch and rising wages could erode as much as 45 percent of India's market share by 2007.

Indian industry watchers acknowledge that the country's outsourcing industry -- its golden goose of the moment -- is indeed facing a "serious" problem.
<!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Unless India devises a long-term roadmap to improve infrastructure and consistently grow its skilled labor force, he said India will see some of its offshore BPO clients shift business elsewhere.

<b>"Although India's infrastructure is improving, it is not keeping pace with the rapid growth of the industry,"</b> the report said.

The Gartner report pointed out that while no single nation yet poses a direct threat to India as a high-quality/low-cost location, over the past two years, <b>more than 50 other countries have emerged that together could pose a viable challenge to India in the months ahead. </b>

Gartner estimates that <b>India's current 85 percent ownership of the BPO market share could dwindle to about 45 percent by 2007.</b> <!--QuoteEnd--><!--QuoteEEnd-->