IT-BPO revenues from Germany, Switzerland, Austria may grow to $10 bn by 2020

Indian information technology (IT) and business process outsourcing (BPO) sectors may get almost $10 billion from Germany, Switzerland and Austria by 2020, up from the $2.6 billion they earn from this region across the IT, BPO and engineering services space, against the addressable market size of more than $53 billion.

Business from this region, which is the largest market in Europe, has the potential to grow so much, provided Indian companies take the strategic and tactical steps required to succeed in this market, according to the latest report by Nasscom and consulting firm PricewaterhouseCoopers.

The report called ‘Opportunities for Indian IT – BPO industry in Germanic countries’ pegged the BPO market to be around $4 billion and offshored engineering services around $3.4 billion. Germany and Austria each spend close to 2.5 per cent of the GDP on IT, whereas Switzerland leads the norm by spending over five per cent.

“There is a huge demand in the small and medium enterprise (SME) sector that has largely remained untapped, and verticals like automobile, manufacturing and logistics have emerged as quick-win opportunities for Indian companies,” said Sankar Ramamurthy, executive director, PreicewaterhouseCoopers.

The report revealed that there also lies a huge opportunity in the large mid-market segment in the Germanic region. It added that over 95 per cent of the enterprises in the Germanic countries operate in chemical, machine building, automotive and electrical sectors and belong to the small and medium size enterprise segment, which is expected to give the most business.

“Largely export-dependent, these economies suffered heavily during the recent financial meltdown but are recovering. Another challenge is of their shrinking working age group and the shrinking enrolments in universities in tech courses,” said Nasscom Vic-President Ameet Nivsarkar.