US cannot stop outsourcing, says Karnik

United States of America cannot stay away from outsourcing, especially to India, as it has not only helped them increase revenues, but also cut costs, according to Nasscom president Kiran Karnik.

Addressing a session on 'Exploding the Myths of BPO', in Bangalore on Sunday, Karnik said, "Technically, US is out of the recession phase. During recession, when their (US companies') toplines were not growing, they looked at cutting costs and one of the best ways to continue doing that is by outsourcing them. In fact, by outsourcing to India, they are realising that they can not only increase revenues but also cut costs."

Karnik said that since the US is bound to face a shortage of manpower, it must either import labour or export work.

Replying to a query on the impact of US elections on Indian outsourcing, Karnik said, "India has taken more column inches in the US presidential elections (referring to the media reports on outsourcing). The debate on outsourcing is mostly a rhetoric. In the US, economics have always predominated politics. As they are aware of this, they are not going to stop outsourcing. Besides, the West also faces the problem of an aging population. We have examined the supply and demand side and even in the long-term, I assure you that outsourcing is sustainable."

Karnik added that China is also likely to face the problem of an aging population in 10-12 years from now as a result of the 'one-child norm'.

Earlier, Karnik blamed the media for associating BPOs with call-centres only.

"BPO is not about call centres alone. Call centres constitute about 40 per cent of the outsourcing space. Call centres are indeed sophisticated work. But, they are just one segment of the BPO industry."