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INFORMATION TECHNOLOGY (I.T.)

INDIA’S 2008 I.T. PROSPECTS

India's information technology market is poised to expand 24 percent in 2008 as it enters a new "growth trajectory," an industry report announced recently.

Revenue from the domestic IT and outsourcing market will touch 1.1 trillion rupees ($27.9 billion) this year, offsetting a slowdown in IT spending worldwide, according to the report by market research firm IDC. "The industry is now onto a new growth trajectory," IDC India country manager Kapil Dev Singh said in a statement.

India's booming economy, growing annually by nine percent, is spurring domestic IT spending as companies upgrade computer systems to stay competitive and consumers log onto the Internet.

India's software and services exports grew by 33 percent to 31.4 billion in the financial year to March 2007 while total revenue climbed by 31 percent to $40 billion.

The domestic market has largely been ignored by an industry that has boomed on work from Western firms trying to cut costs by taking advantage of India's English-speaking, computer-savvy graduates who work for lower salaries.

As the rupee strengthened 12 percent last year against the dollar, eroding revenue from the US market that accounts for two-thirds of software exports, IT companies such as Tata Consultancy, Infosys and Wipro are looking at other countries and the home market to diversify risks.

"The India domestic IT market will transform significantly," propelled by a greater need for more sophisticated services, the report said.

Philippines

Since the introduction of Internet in the Philippines in the 90's, the IT industry in the country has been on a roll. Often viewed by experts as the susnshine industry, the success of the dot-com business can be mainly attributed to the merging of information technology and communication, which is now tagged as the Information and COmmunication Technology (ICT) sector.

Reports indicated that in 2004, there was an influx of foreign investments in ICT in the Philippines mainly due to the country's advantage in terms of proficiency in the English language, cheap labor, human resource skills, and the presence of ICT infrastrauctures.

With Internet access - alongside high PC use - being made available even in the remotest parts of the archipelago, experts believe that there will be a substantial growth and development of IT-enabled services in the next few years.

OUTSOURCING; PH'S STRONGEST LINK
The outsourcing industry, which is the process of hiring outside professionals to perform specific function inside a company, remaains to the ict industry's strongest link. But just as the global demand for outsourcing services continues to rise - it is projected to reach US$180 billion by the tear 2010 - a number of outsourcing services, other than call centers, are laready thriving in the country.

First on the list is the digital animation production, which includes pre- and post- production services for cartoons and animated films. According to a BusinessWorld report, the Philippines, through apool of first-rate local animators, has been providing services such as layouting, in-betweening, cleanup digital background production through scanning, colr styling, special effects creation, digital ink and paint applications, web design, graphic and art design, as well as mobile applications and art and animation training for more than two decades.

The report also said that revenues form providing these kinds of services in the international market is seen growing by 20 - 30 % annually, from the US$50 million that the industry earned in 2003, Filipino animation houses, about 20 companies to date, are xpected to grow in the coming years as the world animation market is seen to exceed it is approximately US$60 billion worth of revenues in 2005.

Medical transcription, the process of encoding into electronical format the oral dictation of physicians and other healthcare professionals, also presents a bright prospect as far aas outsourcing is concerned, thanks to a US law, which requires all medical records to be computerized. Reports said that the US is outsourcing 42% of its medical transcription requirement abroad, and aabout 6,700 hospitals have yet to convert their medical records into electronic format. the same report showed that the US is short of 80,000 medical transcriptionists to meet 230,000-requirement. the number of US professionals are dropping annually due to the rising cost of medical-related education and an ageing population. The decline led to outsourcing of transcriptions, making companies offering medical transcription in the Philippines grow from nine companies in 2001 to 40 last year.

India

No other industry has been as strongly identified with the success of India as information technology (IT) and IT enabled services (ITES).

India's Department of Information Technology reports that the Indian software and services export is estimated at Rs 78,230 crore (US$17.2 billion) in 2004-0, as compared to Rs 8,240 crore (US$12.8 billion) in 2003-04, reflecting an increase of 34 per cent both in rupee terms and dollar terms.

SUCCESS FACTORS
Among the factors that have been credited for its success in such a short time are its sensitivity and reponsiveness to the global IT market, its vasyt pool of highly qualified manpower, a conducive policy framework from a supportive government, and the emergence of Indian players who continue to promote India as IT and ITES powerhouse.

The Indian IT software and remote services industry is possibly one of the most proactive sectors within the country's economy. It has managed to keep up with the demands of customers worldwide and even anticipated emerging opportunities and growth areas. As a result, Indian IT players have moved up the ITES value chain to provide services such as software integration, web services, aand IT consulting. As early as 2002, for example, players anticipated the boom in the business process outsourcing (BPO) component of ITES, and started to build IT enabled services that can provide BPO capability.

In addition, the skills set of the country's manpower to meet the demand. In 1986, there were around 6,800 knowledge workers in the IT industry; the number jumped to 650,000 in 2003. Today, even at over one million professionals in the industry, demand still far outstrips supply.

Its quick response time aanticipated the downturn in the U.S. economy - its largest market accounting for over 70% of its export revenue in the industry - allowing players to seek the potential of other markets such as those in Europe, ustralia, Japan, and CHina.

India's export-oriented software industry grew at an impressive rate over the past 10 years. Export revenues from ITES grew from US$2.5 billion in 2002-22003 to US$3.6 billion in 2003-2004, reflecting a 44% growth year-on-year. In 2003-2004, ITES exports accounted for over 27% of the total export revenues of India's IT and ITES industry.

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