The globalization of services is offering unprecedented opportunities for emerging and developing economies to diversify trade portfolios' and move into high value industries. IISD explores the enablers, drivers, and sustainable development implications of this phenomenon with a specific focus on the BPO and ITES industries.
IISD's primer on Responsible Competitiveness in the Information Technology Enabled Services (ITES) explores an ambitious agenda for countries, cities and firms to create an outsourcing model that is genuinely sustainable. In the past decade, sustainable development proponents and the ITES industry have missed two clear opportunities to engage in developing solutions for sustainable development.
They now have a third chance—ITES 3.0, which recognizes that investment in ITES alone, will not automatically increase resource gains and productivity. Rather, ITES needs to be given its due place as a new industry, while investment promotion agencies need to broker agreements that will increase employment, innovation and entrepreneurship in their own countries.
The current global economic downturn will only increase the momentum for ITES 3.0 as governments create even more streamlined value chains, a more equitable distribution of incomes and design stimulus packages to support new ‘green' jobs and technologies.
The second wave of globalization is here, and it is in services. In the past, , the bulk of services outsourced from one country to another were linked to functions that were repetitive, routine and relatively uncomplicated, such as back office data entry and data processing, back office administration, human resource administration, bookkeeping, facility management, publication layout, and customer calls centres.
Today, “off-shoring” has expanded to include more specialized and expert tasks that have a direct impact of an organization's brand value and bottom line. Hospitals are off-shoring medical transcription, diagnosis and decisions on surgical intervention. Schools and universities are turning to teachers and lecturers in India to provide support with tutorials and thesis supervision. Commodity and consumer product firms are outsourcing accounting, marketing, design and R&D functions. Legal firms are off-shoring litigation and patent research. The insurance and investment industries are off-shoring analysis and actuarial functions.
Is this trend likely to continue? And what are the implications for triple bottom line performance of both firms and the nations involved in these trading transactions?
IISD's primer Towards Sustainable Outsourcing: A responsible competitiveness agenda for IT-enabled services (PDF - 4.5 mb) explores this debate further.
We welcome expressions of interest and comments on this report as we continue to engage in this debate.
Information Technology Enabled Services (ITES) Sector Industries Might be Cut Down to Size, but Globalization Will Continue: An IISD Commentary (PDF - 204 kb)
IISD and AccountAbility will soon release a report on responsible competitiveness in information technology enabled services, which we hope will raise the profile of business process outsourcing and software services as catalysts for more sustainable and equitable globalization. Our primer looks at how this could be done—how the world can be made more sustainable and "flat" though improved opportunities for knowledge and growth.
In advance of that release, Project Officer Oshani Perera looks at the impact of alleged corruption in the information technology enabled service sector.
Sustainable Development and the Globalization of Services: A focus on Business Process Outsourcing (BPO) and Information Technology Enabled Services (ITES) (PPT - 544 kb)
IISD's research on the globalization of services continues with a closer look at the emerging business process outsourcing (BPO) and the information technology enabled services (ITES) and their contributions towards sustainable development.