Browse > Home / BPO Blogs / BPO: Providing India’s rural poor with opportunity

BPO: Providing India’s rural poor with opportunity

December 7, 2009

Despite the constant reports about high unemployment rates along with how outsourcing is destroying jobs and livelihoods, the trend towards outsourcing has the potential helping lift some of the world’s poorest people out of their misery. In fact, the New York Times has recently reported that outsourcing has reached rural India and is already providing jobs to people who have never held a job in their lives.

Now, to first put things into perspective: There are already about 1 million workers in India employed in the country’s call centers, BPOs and IT companies which are usually located in pristine office complexes and campuses in major cities around the country. However, this is only a tiny fraction of India’s 1 billion plus people. Moreover, 70% of Indians still live in rural areas as India has (for the most part) skipped the industrial phase of development and headed straight into the information age. Hence, there are very few opportunities for rural Indians who migrate to the cities in search of jobs.

However, the outlook for rural India is beginning to change. As the New York Times recently noted, a company called Rural Shores is taking outsourcing jobs to Indians living in rural India. Currently, Real Shores has three centers in operation but they aim to have 500 centers spread across India within the next five to seven years that will employ 100,000 rural Indian youth doing book keeping, bills processing, document scanning, data entry and other simple tasks that do not require English fluency as most rural Indians at best only speak basic English. The Real Shores model is a win-win scenario for all as an operation in rural India comes with significantly lower rental and wage expenses. In fact, Real Shores can do the same work for half the price that a competitor in a big city will charge as a minimum wage salary of US$60 a month is considered excellent in rural India. 

India's rural BPO
Moreover, its not just small outsourcing players like Real Shores who are warming up to the possibilities that rural India has to offer. In fact, Business Week reported back in June that major Indian IT outsourcers are looking at ways in which the rural Indian workforce can help them to capitalize on potential growth opportunities in the domestic outsourcing market (which is also estimated to be worth US$1.6 billion and to be growing at a compounded rate of 38%). Business Week noted that BPO heavyweight Infosys BPO was reported to be planning tie-ups with service providers who have locations in small towns and rural areas and their plans call for a revenue sharing model where they find the customers and the rural operator performs the service. Meanwhile, Wipro BPO was also reported to be planning to enter the domestic market soon and it was noted that they already provide some technology and support to a few rural operators and that they may explore service delivery tie-ups with them.

However, there are drawbacks to operating in rural India. In fact, Business Week quoted Wipro’s Chairman back in 2007 as saying that it would be difficult to achieve international standards for service and to scale up village and rural based operations while an executive with another operation similar to Rural Shores also noted that there is a significant amount of skepticism with regards to the quality of the work that rural Indians can provide to potential customers.

Hence and for now, the outsourced work done by rural Indians will most likely be work outsourced from domestic Indian firms rather than work coming from customers overseas. Nevertheless, if Rural Shores and other companies with similar business models can prove that rural India and its workforce has a place in outsourcing, look for the model to catch-on elsewhere and help to alleviate rural poverty around the world.

Share and Enjoy:
  • LinkedIn
  • TwitThis

Related posts:

  1. Why are Indians (and Filipinos) better at providing services rather than at making good IT products?
  2. Is it because they can’t say g’day right or is something else to blame?
  3. Will domestic home-based workers be the future of call centers?
  4. Is geographic diversification a threat to the Philippines’ share of the global outsourcing market?
  5. Is India losing in voice based outsourcing?


Written by JohnU · Filed Under BPO Blogs 

Comments

2 Responses to “BPO: Providing India’s rural poor with opportunity”

  1. Taskcity on December 8th, 2009 1:36 am

    I ‘glad to hear the news.
    They need more opportunity I think

  2. Alok Tomar(CEO & MD) on December 8th, 2009 2:44 am

    really a good work …..i really appreciate this.

Got something to say?