Business Process Outsourcing or BPO as it is commonly called is the process of either contracting operations and responsibilities of specific core business functions or processes to a third-party service provider or reorganizing it within a shared services facility in a low cost geography. This includes outsourcing of business processes and functions such as customer service, technical support, accounts management, payroll processing, among others. Over the years, as a number of clients have realized benefits of BPO and as the service provider market has matured, this industry has evolved from providing simple voice based support to transaction based services and now increasingly decision support or knowledge based services.

Global BPO Industry presents a huge opportunity for developing nations. The global market size for BPO services has been estimated to be over $115 billion in 2008. The industry has grown significantly over the last few years and is expected to reach $181 billion by 2012, growing at a strong and steady rate of over 11 percent per annum.

The globalization of business services has proved beneficial to emerging economies especially the likes of India and Philippines, in multiple ways. BPO friendly policies have helped these countries generate employment, attract investments, increase exports, improve technical and physical infrastructure, and improve quality of life for their citizens.

Many emerging economies in Africa, Latin America, Eastern Europe and Asia are now realizing the benefits of creating BPO friendly environment in their economies, so as to increase employment. Donor agencies such as World Bank, African Development Bank, UNDP, IRDA and Rockefeller Foundation etc. have realized the importance of Information Technology and allied businesses in transforming developing economies, and are supporting many such initiatives. As the number of countries eyeing a share of the global BPO opportunity increase, it is imperative for governments and industry associations in these countries to clearly understand the BPO market place and its specific investment drivers. Based on a complete knowledge of the BPO environment and a clear understanding of their respective strengths and weaknesses, they need to clearly articulate their vision and design and implement enabling conditions to attract investments. In this paper we look at strategies that some of these countries can adopt so as to attract quality foreign investments and generate employment.