According to published reports, bidding for outsourcing contracts are more competitive in the wake of a recession. Hence, a consolidation in the sector is expected. In fact, rumors abound that outsourcing giants Capgemini and Infoys are in merger talks. The Managing Director of Business Advisory firm TPI, Duncan Altchison, said even if the merger between Capgemini and Infosys does not materilaze, it is still a reflection of the current market momentum. Meahwhile, other analysts are speculating a heightened activity in the mergers and acquisition sector in the next one or two years.

Globalization is another buzzword in the outsourcing industry. There is some amount of angst about India losing its competitive edge in the sector. There is also some talk of an impending skills crisi in India. However, other analysts feel that India is soon to be replaced by China’s entry into outsourcing. Incidentally, several Indian outsourcing firms like Wipro are investing heavily in China in an attempt to gain an andvantage in the Chinese and Japanese markets.

A study done by an advisory firm said that Chines firms are likely to race past Indian outsourcing firms as the favored locations for global offshoring by the year 2011. Others disagree that the skills offered by Chinese outsourcing firms are not as good as those offered by their Indian counterparts.

Nonetheless, globalisation is making more countries eager to cash in on the outsourcing boom as a recovery in in sight in the U.S. in 2010. Apart from BRIC nations – Brazil, India, China – Mexico, Poland and Egypt are also making their entry into the near shore market.
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