Say BPO and usually the first set of images that flash through the mind are Gen-X youngsters working in swanky hi-tech offices, with lavish canteens and a fleet of air-conditioned cabs ferrying them around town and the outskirts at odd hours. It is easy to think BPO-owners are quite like King Midas of our times. After all, if they can offer all those facilities and pay packets to entry-level employees, it?s not hard to imagine them making big profits. Right? Wrong. Contrary to general perceptions, the BPO industry is at an inflection point from where it is about to tip down. A large number of entrepreneurs have closed shop because of huge operational losses.

It happens with almost every industry that in a nascent stage, a large number of players jump onto the bandwagon. As the industry matures, some of them survive while the rest eventually die out in the cut-throat competition. That has happened to the BPO industry in India as well.

Added to this is a long list of woes: over- dependence on North American and European mid-rung markets, crippling effects of the sub-prime mortgage crises, rupee volatility, rising inflation, soaring fuel prices, intra-industry attrition, looming taxes, global warming and an ill-informed and non-sensitised government machinery.

What rub salt into the wound is that outsourcing has not been allowed to mature into an industry. It has always been viewed as a part of IT and termed as ?ITeS??an acronym for IT-e nabled Services. This ITeS is a funny term, as in the 21st century there is hardly any business that is not ITeS. Even households are ITeS today with everyone extensively using phones, computers, laptops, the Internet, broadband and so on, both for work and play. It is beyond explanation why BPOs have been given this exclusive (dis)privilege of being called as ITeS?

By terming BPOs as ITeS, a false perception is formed, levelling the BPO industry maturity index to that of the IT industry. It is like comparing a three-year-old Labrador to a three-month-old Pug. According to a Nasscom-McKinsey report, the annual revenue projection for the Indian IT industry is $87 billion. On the other hand, the current size of the BPO industry is $11 billion, by a Nasscom-Everest India study. The IT industry has taken almost two decades to reach this level. The BPO sector is less than half a decade old and it is being clubbed with a fully developed IT industry, although it has been largely left to survive on its own. Although IT is now strong enough to do so, the BPO industry would be hit really hard by this approach. The BPO Industry rightfully deserves at least 10 more years of fiscal support and benefits? similar to those that were given to the likes of garment and software (IT) exporters for scores of years and are now being denied to the BP industry by clubbing it with the IT industry.

BPO is the only industry that can employ people without fussing too much over conventional yardsticks like education, economic class, location or age. In any other industry, one needs a certain level of education to be ?employable?. And not everyone in our country has the luxury of good education, but this should not be a hindrance for a person to earn a livelihood. Of course, there are jobs that do not require a degree per se , but then they require huge investments and infrastructure to employ the otherwise ?unemployable?.

Now every village cannot have a manufacturing plant or an IT company, but every village can surely have a BPO. At the very least, all that is required is a few phone connections and/or computers for a rural BPO to be in place. People can carry out voice, typing, accounting and transcription services. They can work on telemarketing in their local dialect, tapping suburban and urban markets; disseminate information on agricultural commodity and fertiliser pricing; send weather alerts; offer agritech, debt and lifestyle counseling and do a lot more than was once done by Krishi Darshan on Doordarshan.

In fact, already tier-II and tier-III cities are becoming hot destinations for BPOs and very soon village or rural BPOs would be a common thing. States like Bihar and Rajasthan have already set up village BPOs. But if they don?t get the kind of support they require, these small entrepreneurs who are investing all their savings and capital in this ?emerging business? would be forced to leave the industry like so many others.

This is neither premonition nor pessimism, simply compare the HR/Job supplements of mainline newspapers of today and the corresponding period for last year. You get the picture. Keeping these facts in mind, how can BPOs be expected to create two million jobs by 2012? The sector sure has the potential to do so, but if it is left to sustain on its own, the full potential can never be realised.

The projections for the BPO sector are huge: almost five-fold increase in size from $11 billion to $50 billion by 2012 and a 50 % growth rate over the next five years as compared to 35% in the past five years. Two million jobs across the country in four years–the BPO sector sure has enormous untapped potential but mere potential does not amount to performance. The message is clear and simple. This sector needs strong government support in order to grow independently from a budding sector into a mature industry. If not, it may remain a just a sub-sector of IT. In the worst case scenario, it may even become a Harvard Business School case study of a sector that once had immense potential but could never realise it due to the lack of political and bureaucratic will in India to understand its nuances.

?The author is the president of Business Process Industry Association of India