Economics · Ch 9 — Tertiary Sector
Role of Information Technology and IT-enabled Services
Role of Information Technology and IT-enabled Services
Within the wider services sector, Information Technology (IT) and IT-enabled Services (ITeS) deserve separate attention because of how visibly they have shaped India's recent growth story. IT refers chiefly to software development, systems design and related technical services; ITeS (often loosely called BPO — business process outsourcing, or its more skill-intensive cousin KPO — knowledge process outsourcing) covers voice-based and non-voice back-office processes such as customer support, data processing, accounting and research support delivered on behalf of client firms abroad.
India's comparative advantage in this field rests on a combination of factors: a large pool of English-speaking, technically educated graduates; wage costs that, for a long period, were considerably lower than in the developed economies that were the main buyers of these services; and a time-zone difference from North America and Europe that allows Indian firms to provide a form of round-the-clock, 'follow-the-sun' service delivery. …
Services delivered with the help of information technology and telecommunications but not themselves software development — such as call-centre support, data entry, transcription and back-office processing — commonly performed …
The commercial advantage a services exporter gains from being located in a different time zone from its client, allowing work to continue or support to be offered outside t …