BPO and LPO Growth Spreading

According to a research report recently released by Duke University, outsourcing demand is rising to new highs. Call centers around the globe are hiring new employees to meet both current and anticipated growth. The study polled providers of business process outsourcing services in 50 different countries. The growth is quickly expanding due to the rising tide of the global economy. Start-up call centers are popping up in new countries and have created a more competitive landscape. Existing outsourcing companies are opening centers of their own in different countries. Assuming prices remain constant, the increase in supply should lead to an increase in the quantity of service, or volume demanded. The growth is coming from centers in countries such as the Philippines, Costa Rica, Poland, and the Eastern Bloc.

These countries, as well as many others, are beginning to take aim at market leader India. India continues to maintain the largest slice of the BPO pie, but governments elsewhere are stimulating their economies by building capacity and incentivizing investment in the sector. Not surprisingly, China has entered the picture and designated 20 cities as business process outsourcing hubs to attract more capital from international investors. The Philippines is also in the mix as the Philippine Economic Zone Authority is increasing its subsidies to BPO office parks after its government declared outsourcing to be a priority industry. The survey mentioned that only 16% of Indian service providers see competitors from other emerging economies as a threat. This may be hubris, or just short-sightedness. Countries like China and the Philippines offer advantages unique to both countries and should continue to eat away at India's lead should they not adapt to accommodate the changing world.


India has shown it is willing to do so by taking the early lead in legal outsourcing. The survey identified legal process outsourcing (LPO) as the potentially hottest sector within the outsourcing industry. Legal process outsourcing includes legal support services such as electronic discovery (ediscovery), document tagging, and document review. LPO growth has been strong and is likely to remain so, particularly in India, the survey found. LPO is growing at a 40% clip annually in India, with about 110 LPO companies identified.