Who Will Dominate Offshoring in 2020?

While reading through the interesting article in BusinessWeek - Who Will Dominate Offshoring in 2020?, written by Noshir Kaka, director at McKinsey based out of Mumbai, one point caught my attention in particular.

India graduates three million students every year, while the entire outsourced service industry employs 2.1 million in total. Therefore, India is effectively utilizing only 10 percent of their available workforce. Room for expansion is huge.

Kaka also discusses difficulties in the education system as well as language barriers, which are concerns for potential service buyers in more effectively utilizing this vast talent pool.

In our experience, we have seen the same trends with the legal outsourcing industry in India. We hear the often-quoted statistic that India produces approximately 80,000 legal graduates every year. But across the board, vendors typically recount the difficulties of recruiting qualified staff. In higher-level service areas such as legal outsourcing, based on our experience with a number of Indian LPO vendors, we see a significantly lower utilization rate for law graduates than the 10 percent noted by Kaka.

For the legal outsourcing industry to continue on its current growth trajectory, an increase in the supply side of the labor equation will be critical.