By Alexander Villafania
MAKATI CITY, METRO MANILA - The growth of the business process outsourcing (BPO) indirectly generates employment in supporting industries such as food and beverage and retail, according to a study by research firm Tholons.
According to the study, the BPO industry in the Philippines has generated 530,000 direct jobs and $8.9 billion in export revenues.
But the presence of BPO companies also resulted in nearly 2.1 million “associative” jobs from other sectors .
The study, titled “IT-BPO Industry’s Direct and Indirect Economic Impact, cited that half of those hired in indirect jobs belong to the 18 to 30 years old age group, which is the typical working age of many Filipinos.
Tholons noted the “multiplier effect” of BPO firms in the Philippines and India. It highlights the impact of outsourcing on other industries and how it strengthens the overall business ecosystem in the countries where they are present.
The report cited that the higher income capacity of just an entry level contact center agent - around $330 to $340 per month - has increased disposable income and better purchasing power.
This resulted in the rise of rest and recreation services, targeting the BPO market. In the Philippines, the study cited at least 20 malls were built over the last 10 years in response to higher buying power.
BPO firms have also encouraged the development of special government policies to support the continued growth and sustainability of the industry. The most common policies are related to technical skills development, basic and tertiary educational development, and scholarships and retraining for “near-hires” who are then redeployed to BPO firms.
Another indirect result of BPO’s presence in the Philippines is infrastructural changes, such as telecommunications, public works, and utilities. There have also been increases in capital investments for information technology parks where BPO firms are most commonly found.
Tholons identified 152 IT parks in operation and another 60 IT parks being built in the Philippines.
Anika Vashistha, Tholons Director for Strategy and Growth, said BPOs have a direct impact on the economy but there are also ancillary effects that create ripples for growth.
“From a local standpoint, and as a country’s service delivery matures, more Tier II cities have emerged to fulfill the unmet demands of larger Tier I locations. For instance, in the Philippines, Manila is known to be the top outsourcing destination. But the country also has Cebu City as another emerging destination for outsourced services,” Vashistha said.
