Feb 4, 2005

China vs. India

While outsourcing as a news topic seems to have come and gone with the election, it is still alive and well as an industry.

Of China's 8,000-some software services providers, only five have more than 2,000 employees, the firm said in its first 2005 McKinsey Quarterly report.

India, by contrast, has fewer than 3,000 software services companies, McKinsey said. At least 15 of these have more than 2,000 workers, and some--including Infosys Technologies, Tata Consultancy Services and Wipro Technologies--have "garnered international recognition and a global clientele," McKinsey said.

Although revenue from information technology services is rising in China, it is barely half of India's $12.7 billion a year, McKinsey said.

I have mixed feelings about what the impact of outsourcing has really been but given the $9 trillion U.S. GDP the above numbers look a bit insignificant. These numbers exclude subsidiaries but even if that is 90% of the job shift the total impact is only around $190 bln.

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