The outsourcing industry in the Philippines, which has dethroned India as the country with the most call centers in the world, is worried that the rise of artificial intelligence (AI) will eat into the US$23 billion sector.
AI-powered translators could dilute the biggest advantage the Philippines has, the wide use of English, an industry meeting was told this week.
Other AI applications could take over process-driven jobs.
The Philippines’ business process outsourcing (BPO) industry is an economic lifeline for the nation.
It employs about 1.15 million people and, along with remittances from overseas workers, remains one of the top two earners of foreign exchange.
“I don’t think our excellent command of spoken English is going to really be a protection five, 10 years from now. It really will not matter,” Sutherland Global Service chief delivery officer Rajneesh Tiwary said.
The Philippines, which was a US colony in the first half of the 20th century, overtook India in 2011 with the largest number of voice-based BPO services in the world.
“There’s definitely reasons to be concerned because technology may be able to replace some of what could happen in voice,” said Eric Simonson, managing partner of research at Everest Group, a management consulting and research firm.
AI, which combs through large troves of raw data to predict outcomes and recognize patterns, is expected to replace 40,000 to 50,000 “low-skilled” or process-driven BPO jobs in the next five years, IT & Business Process Association of the Philippines (IBPAP) president and chief executive officer Rey Untal said.
Contact centers make up four-fifths of the Philippines’ total BPO industry, which accounts for 12.6 percent of the global market for BPO, according to IBPAP.
BPO firms in the Philippines list Citibank, JPMorgan, Verizon, Convergys and Genpact among their clients.
While the US remains the biggest customer for the industry, demand for BPO services from Europe, Australia and New Zealand is also growing.
The Philippines’ share of the global outsourcing pie, estimated to reach about US$250 billion by 2022, is forecast by the industry to reach 15 percent by that year.
However, to get there, the nation must prove to the world it has more to offer than just a pool of English-speaking talent.
BPO executives said the nation has to take on high-value outsourcing jobs in research and analytics and turn the headwinds from AI into an opportunity.
The key to stay relevant and ahead of the competition is to ensure workers are trained in areas like data analytics, machine learning and data mining, they said.
“You will see in the next few years more automation coming in the way we do things in IT and BPO industry, robotic processing, the use of chat bots,” IBM Philippines president Luis Pined said.
“If we are ahead of the game, we will be at an advantage where people will give us more work, because we are cheaper and productive,” Pined said.
IBM Philippines divested its voice business in 2013.
IBPAP has projected a rise in the number of mid and high-skilled jobs or those that require abstract thinking and specialized expertise that should bring overall headcount in the BPO sector to 1.8 million by 2022.
Untal said that augmenting the English-language skills of the Philippines with technology will be a “game changer.”
“Who else can compete with us?” he added.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by