India's competitive edge

weekly roundup This week, a senior Aspect Software executive said China has what it takes to compete with India for a piece of the lucrative global contact center outsourcing market.

He reckoned that because English is being taught in China's schools, the country will be able to grow its pool of workers to support its call center industry, and thereby rival India in three to four years.

I find his claims a little presumptuous. India will continue to maintain its business process outsourcing (BPO) edge for many, many years to come.

Let me explain.

First, while English is being taught in schools, language proficiency cannot be achieved in a classroom environment. Many Chinese today, including office workers in multinational corporations, do not use English in their everyday lives. Yet, this is necessary for them to speak good English for effective international business communications.

A good Chinese friend commented to me once, that she was labeled "pretentious" by a fellow colleague who saw that she was using English as her phone's menu language. With such attitudes toward the use of English among China's young, surely it'll take more than three to four years for China's English proficiency to match the Indians?

Secondly, because of China's one-child policy designed by former Chinese Communist Party leader Deng Xiaoping in 1979 to limit the growth of the country's population, China is now facing an aging population.

According to the United Nations, China's young people under 25 years, only make up one-sixth of China's total population of 1.3 billion. Compare this to India, whose young people make up half of India's 1.1 billion-strong population.

Finally, while the Aspect Software executive correctly pointed out that China is now used to provide BPO services for Korean and Japanese companies from the Chinese city of Dalian, so are other locations such as Eastern Europe and Latin America used to serve Europeans and Spanish-speaking clients, respectively.

And in most of these locations, Indian companies have already set up shops to export the well-known Indian brand. In a global delivery model, the processes and expertise that an Indian BPO shop offers matter more than where the job is done.

In other news this week, read about the top outsourcing companies in the world, why uncertainty looms over Lenovo's restructuring plans, and the 'patent tax' that the Software Freedom Law Center claims businesses are paying to Microsoft.