I was having a discussion with a friend on how far can the offshore communications industry reach (outsourcing and call centers), in regards with the economic importance and its role as an employment maker in the developing countries of Asia. We all know the reason why these American or European companies invest a lot when it comes to building their bases in 3rd world countries such as India and the Philippines. The definite answer would be the low cost of production. If they were to establish their businesses in the US or in any European key cities, it will cost them big bucks. On the other hand, putting call centers and BPOs on countries like India and Philippines where almost 90% of the population speaks English is a more convenient way for them to cut cost. But how do these firms really choose where to invest between the two countries?
India came first in hosting call centers even before the Philippines does. However, there are failures during its first terms mainly because most Indian English speakers used British English, of which is not primarily understood by many American customers. For this reason, some moved to the Philippines where American English is mostly used. It is also notable that infrastructures and equipments in the Philippines is relatively a lot better than those in India. In the last few years, Philippines and India enjoyed the benefits of this foreign investments - giving jobs to millions of people, giving big taxes to the government, and helping the country to be more globally competitive.
India has maintained its number of establishments regarding the said industry for many years while Philippines has seen great increased and improvement. India is known for being the largest country in Asia who speaks English, Philippines on the contrary is the largest speaking in Asia when it comes to people per square area criterion thus gaining the title 3rd Largest English Speaking Country in the World, next to USA and Britain.
Its like there are 9 Filipinos who speak English in one room as compared to India's 7. But there are more rooms where Indians are, obviously because of their country's massive land size. It is also noted that the quality of English speakers in the Philippines is way better than those living in India. However, it is also known that India's salary cost is cheaper than those in the Philippines. Investors are torn in those two things, invest in India where cost of production is cheaper? Or invest in the Philippines where the quality or work is way better and cost of production is cheap but not cheaper than India?
Eitherway, I feel both countries will do great in few more years to come. But I believe that kind of industry will not stay permanently. So I think both countries must start looking for alternative investments now.
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