7th E-Services Expo: KPO

The Businessworld reports regarding the recently concluded E-Services Expo, wherein the Philippine government asked the local BPO industry to "Upgrade" in order to keep up and overtake the competition. The local industry was also urged to move into the KPO (Knowledge Process Outsourcing) business in order to bring in higher revenues and eliminate the need to compete in the cut throat BPO sector.

"According to BPO advisory and equity manager Tholons, Inc. the KPO market is poised to grow to $17 billion by 2010 from last year’s $3.7 billion. India is expected to capture around 70% of the total market, while Philippines — along with China, Russia and the Czech Republic — are described as the emerging players next to India. Tholons chairman and chief executive Avinash Vashistha said the Philippines can compete well in the areas of animation, content, health care, as well as financial and legal services. "India will definitely be the dominant player, but Philippines will be distant but clear second," Mr. Vashistha said.

Mr. Vashistha and Harry van Geijn, the BPO consultant of the government of the Netherlands, both agreed that Europe is a lucrative market for the Philippines to tap in the area of KPO.

One of the biggest drivers of demand for Philippine-sourced KPO services is that continent’s declining population.

"Population [growth] has already reached its peak and is estimated to decrease 10% year on year. But, we still remain a growing economy and offshoring is the only way to deal with this," Mr. Geijn said.

"The European Union is a very high potential market. This year, you will see more KPO activities because the labor force problem is not going to be better. The same is true with the US," Mr. Vashistha said."