THE NEXT MIRACLE (via Tom Morin):

Africa Can Seize Share of IT Outsourcing Market (ECT News Syndication Desk, 07/18/04)

With the rising cost of local production and labor in developed countries like the United States, many companies, especially in the IT arena are looking to the developed world for answers -- and finding them. Countries like India have successfully positioned themselves as niche providers of outsourced labor in IT and are reaping the benefits. And, as analysts continue to predict a growth in this type of outsourcing, the opportunity is ripe for other developing countries to tap into this lucrative market. The question is: Can Africa capture a share of the offshore IT market? [...]

India has managed to create a niche for itself in this area, but it has not happened overnight. Amar Vakil, CEO of Lintas, a US-based management-consulting firm, and founder of the Foreign Investment Promotion Council, explains that there are specific factors that have enabled India to position itself in such a manner. These factors are predominantly a skilled workforce and appropriate infrastructure.

"Twenty to 25 years ago, India was an underdeveloped country. There was a brain drain of skilled labor to developed countries, where, for example there was a need for engineers," says Vakil. "Ten to 15 years ago, people like me, with similar backgrounds, decided to move back to India and there was a huge impetus from government to build world class communications networks. Government started dabbling with public-private partnerships, which now, after 10 or so years are proving very effective."

While this may not be easy to replicate, Vakil believes there are lessons to be learned from India and other countries like the Philippines which have attracted a strong outsource base. "The playing field is level. It is not India's game at all," he says. Although India was one of the first to position itself in this way, "there is an opportunity for other countries to tap into this potential".

Where India focused on information technology and software development, African countries wanting to tap into this opportunity will need to look at IP-enabled services.

Everdream founder and vice-president, Lyndon Rive, agrees that Africa can move into this arena. "Third world countries are getting educated enough to offer IT support, making them an untapped resource," he says. Everdream provides hosted IT software applications and services that protect, manage and support personal computers at medium and large organizations.

In fact, Rive says, many companies are moving away from India as the place to outsource, because of the labor churn that is taking place in India. And African countries have a whole lot going for them.

They'll take China's manufacturing jobs too.

Posted by Orrin Judd at July 25, 2004 11:07 PM