The good and bad of BPO:
It is a good thing because some of the labor intensive activities can be done cheaply elsewhere. That could leave the company to hire more marketing and customer facing people. I know a friend of my kid who is rotting in a Fortune 10 company doing COBOL stuff. She had dreams of doing some exciting stuff while going to college in Comp Science.
So, theoretically, low price and higher productivity should benefit US Companies an hence overall economy.
Now the bad part:
Companies are smart enough for BPO which is basically telecommuting from overseas, yet dumb enough to do the same in USA. There are plenty of people who could work from home at much lower salary if given a chance using a broadband connection. I expected small office centers to pop up with broadband connection in rural communities for just such activities. That neve happened because the Human Resources department is dumb.
So, a lot of well paid people are out of work. That is a drag in the economy because the gain you make in efficiency does not help if you lost the customers. 30% of zero is always zero.
The sad part is, we do not have any real new fangled technology - simply because, the interest groups stifle innovation. Look at RIAA, MPAA etc that do not want new technology unless they can control it with higher price. The other part is Healthcare drags the economy and the price is going through the roof. Government spending will be an alltime high by 2008 due to a lot of retirement.
Bottom Line: You are heading for a crappy economy in 2008, BPO efficiency is neutralized by people out of work, class action law suits creates a major indirect tax, Healthcare sucks all the left overs and Corporations do not wish to use technology to employ people.
Calm before the storm.....enjoy while it lasts.....