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PH outsourcing sector’s role in development

Posted on June 14, 2017

In-House-vs-Outsourcing

Countries that produce rich-country goods become richer. For some fast growing countries like Japan, South Korea, Singapore and China, Manufacturing and exporting goods is the reason behind of their fast growing economic development, These economies started producing things not for their local markets but for export. They have learned how to produce export quality “rich-country goods” to satisfy rich-country needs. Add to this China dominated the highly competitive global market for manufactured goods.

But because of the advances in information and communication technologies nowadays, many developing countries have become more dependent on services to fuel their domestic growth.

Business process outsourcing (BPO) has allowed many developing countries especially the Philippines to expand .Activities range from contract or call center services, transcription, animation, web and software development, backroom operations, data processing, and consultancy services.

In the Philippines, from about a hundred thousand jobs in 2004, the industry now provides over 1.1 million well-paying jobs. IT-Business process outsourcing (BPO) sector in the Philippines has rapidly grown into a $22-billion revenue industry.

The increasingly global trade in services has opened an opportunity for the Philippines to do more learning by doing outside the traditional route of export manufacturing. BPO service export may never match manufacturing export in terms of wide employment potential because it is more difficult to put as many workers to contact centers than in factories, given that working in BPO industry needs higher educational and technological requirements.  But it certainly can be a great second best.

Despite of some threats due to Donald Trump’s “America First” policy the industry is expected to continue growing remarkably fast as market forces work in favor of cost-efficiency, which is still the industry’s main competitive advantage. The Philippine Business process outsourcing (BPO) sector has a potential to provide long-term gains to Philippines national competitiveness both workers and firms have the opportunity to learn rich country services component that could open more opportunities.

 

Source: 

Yes, the IT-BPO sector can play a major role in economic development, Philippine Daily Inquirer