It projects a global outsourcing industry of $275 billion in 2020, in which India accounts for $125 billion with market share going down to 45 per cent from the current (2008) figure of 51 per cent. This implies a CAGR of 10 per cent, hugely down from the 33 per cent achieved in recent years.

But assuming that this does not happen, the likely scenario is Indian exports of $175 billion, a market share of around 40 per cent and a CAGR of 13 per cent. Implicit in this is a loss of competitiveness through inability to fill the emerging skills gap, among other things, with countries like China, the Philippines and Eastern Europe becoming the new challengers. But if India does retain its competitiveness at present levels then, according to the third scenario, exports are likely to be $225 billion, implying a global market share of 50 per cent (same as now) and a CAGR of 15.5 per cent. And the best possible scenario is one in which India innovates to acquire new capabilities, thus becoming more competitive than now, and achieves exports of $310 billion, implying a market share of around 57 per cent and a CAGR of 18.6 per cent (still way below the last peak).

Though such specific figures can and do go awry, they provide a framework for the various players and stakeholders to anchor individual business plans and agendas for action. A lot can be done to remain fighting fit and going by the record of the industry, a lot will be done. With the level of enterprise and innovative spirit embedded in the industry, there is a fighting chance that, having come this far, it will be able to transform itself the right way. A subsequent column will look at the agenda for action outlined by the Nasscom-McKinsey report.

Source: Business Standard