Expensive modern office space a challenge for BPO-KPO hub goal

Monday, 14 July 2014 02:08 - - {{hitsCtrl.values.hits}}

The lack of affordable modern office space is being cited as a key bottleneck for Sri Lanka’s aspirations to become a hub for Business Process and Knowledge Process Outsourcing (BPO-KPOs), industry experts have warned. They said that in India’s Silicon Valley, Bangalore, the price of an air-conditioned square foot of office space is around INRs. 40 (or SLRs. 80), whereas in Sri Lanka it is estimated at between Rs. 200 and Rs. 250 per square foot. Office space being flagged off as expensive is despite the Sri Lanka Association of Software and Services Companies (SLASSCOM) in partnership with PricewaterhouseCoopers (PWC) in a recent industry report stating that Sri Lanka has affordable Class A office space.

This was as per A.T. Kearney’s Global Service Location Index way back in 2011. Industry experts however noted that four years on in relation to Bangalore, Sri Lanka is more expensive whilst the latter also lacks well planned and efficiently motorable (easy access and affordable transportation) IT parks or facilities. They also noted that for a single job, around 80 square feet is required and the target of 100,000 new jobs will require eight million square feet of affordable office space. “With a 200% price differential in office space, Sri Lanka’s future aspirations to become a BPO-KPO hub will be very challenging,” said these experts, who however noted the country’s fibre optic infrastructure was competitive. Last week SLASSCO unveiled plans and potential for Sri Lanka’s IT, BPO-KPO businesses to become a $ 5 billion export industry employing 100,000 people by 2022. The industry body’s confidence stems from the impressive performance in recent years. SLASSCOM said export revenue grew from $ 213 million in 2007to an estimated $ 720 million in 2013. Total employment grew from 33,700 in 2007 to an estimated 75,100 employees in 2013, and the number of companies in the industry grew from 170 in 2007 to over 220 in 2013. SLASSCOM said the country’s overall future strategic vision of reaching $ 5 billion exports goal is backed by its focused approach to differentiation and target markets with planned initiatives for skills development and talent management. The industry’s e-development agenda supports this strategy by building an innovative and continuous collaborative environment conducive for growth.