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Business

Recession fears won't halt outsourcing demand

Anxieties mounting over the raised U.S. debt ceiling and stalling of economic growth could put a dent on the global outsourcing market, although demand for outsourcing services is unlikely to dry up.
Written by Jamie Yap, Contributor on

Anxieties mounting over the raised U.S. debt ceiling and stalling of economic growth could put a dent on the global outsourcing market, although demand for outsourcing services is unlikely to dry up, noted analysts. Asian outsourcing firms added it is too early to determine what impact the present economic climate will bring, and emphasize consistency and innovation are key to staying competitive.

Krishna Baidya, industry manager for Asia-Pacific ICT practice at Frost & Sullivan, told ZDNet Asia that given market volatility and uncertain growth forecasts, organizations would adopt a "wait-and-watch" approach and also postpone decisions. Firms may also be more prudent and reevaluate new and existing outsourcing relations.

Outsourcing vendors, he noted, will hence probably face shrinking deal size, shorter contract periods, or even requests for "much more value at much less price". That said, demand for services will likely remain in the upswing, given today's increasing interconnected world, Baidya pointed out.

For more on this story, read Recession fears won't halt outsourcing demand on ZDNet Asia.

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