Nasscom-Kearney study on IT-BPO industry identifies small cities with big potential

"Decongestion of growth at a macro level and enhancing the level of attractiveness at a location level will require each IT and BPO industry stakeholder to play a proactive role in creating the ecosystem for the sector," the report said.

"These include developing the right vision for the IT and BPO sector development at a location, aggressive focus on enhancing the quantity of talent pool available at a location and addressing issues related to talent suitability, enhancing awareness of international and domestic BPO careers amongst stakeholders, and improvement and development of physical infrastructure and urban environment," it added.

"The Indian IT- BPO sector has been a frontrunner of economic development in select cities. We now see the time as being right to spread this development to a new set of locations, provided the requirements of the industry can be met," Nasscom chairman Ganesh Natarajan said.

"The development of only a few select set of cities has put severe pressure on the infrastructure, costs and also increased migration of resources," said Som Mittal, president, Nasscom.

With the IT-BPO industry maturing, it has become imperative to expand the geographical spread of IT-BPO growth to enable more balanced economic development of the country, lower migration across cities and reduce the burden on the stretched infrastructure in the current hubs, he added.

While big cities will continue to be the preferred destinations for setting up IT-BPO companies, the Tier II cities will have the potential to account for at least 40 percent of the total projected IT-BPO jobs by 2018 provided there is a balanced growth, the report said.