The NASSCOM-McKinsey Report 2005 suggests that the total addressable market for global offshoring is approximately $300 billion, of which $110 billion will be offshored by 2010.

India has the potential to capture more than 50 percent of this opportunity and generate export revenues of approximately $60 billion by growing at 25 percent year-on-year till 2010. The prospects for growth are highlighted by the report’s estimates that the addressable market for global off shoring is almost ten times the present size. Keeping this in mind and looking at other aspects of demand and supply, the report concludes that the Indian IT and BPO industry can generate export revenues of $60 billion in 2010.

Inherent advantages like abundant talent supply, strong cost-and-leadership oriented companies, regulatory support, scaleable high-quality infrastructure, and a growing domestic market, have been instrumental in driving the growth of this sector. By 2010, it could contribute 1 percent per year to GDP growth, directly employ approximately 2.3 million people, provide indirect employment to another 6.5 million workers and pay for a massive infrastructure build-out. This industry alone would account for over 44 percent of export growth over the next five years.

Industry leaders have debated and deliberated about possible stumbling blocks in this growth path, and the factors that dominate are ‘skills’ and ‘quality’ of the workforce, which needs to be improved significantly. As of today, only 25 percent of technical graduates and 10-15 percent of general college graduates are suitable for immediate employment in the offshore IT and BPO industries respectively, as per industry estimates. The skill-sets required by industry are just not there in a majority of the young graduates. This is causing serious concerns of a skills shortage of paucity amidst abundance.

While on one side, India has the world’s largest stock of scientists, engineers and technicians; we have been unable to derive full economic benefit from this talent base because of the mismatch between industry needs and university output. So where and what is it that we need to do to correct the situation? One thing that does seem necessary is a radical change in the policies and mindset with regard to education.