Publishing Offshoring The New Indian Niche

By Aradhana Kolhatkar, Analyst, ValueNotes

Offshoring by publishers to India has been prevalent for over two decades: The oldest buyers of publishing services from India have been the STM (Scientific, Technical and Medical) publishers like Reed Elsevier. Lately, educational publishers (school and college) have also started sending work offshore, as also legal publishers that are catching up quickly. These three segments constitute the bulk of offshored publishing work — amounting to over $440 million of India’s offshore revenues in 2006. The Indian publishing offshoring industry, which employed around 26,000 people in 2006, is expected to grow at about 35 percent per annum till 2010 with the number of people growing manifold to about 74,000 over the next three years. Today, STM services on offer by Indian providers have attained a fair level of offshoring maturity vis-à-vis other verticals. Since there is limited scope for content generation in the STM segment and the possibilities to offshore work have begun to peak, the providers are beginning to tap this $20 billion global educational publishing market, with the offshore potential slated to cross $4 billion by 2011. In recent times, the K-12 (Kindergarten to Grade 12 or Elhi) education market has witnessed significant activity in the U.S.A. This primarily includes creation of content and assessment tests for K-12 students. The segment gained prominence post the No Child Left Behind (NCLB) Act, which requires the state to produce individual, diagnostic test reports of students' progress. Since then, the U.S. federal investment in K-12 education has risen from $15 billion in 2000 to $25 billion in 2005. Dramatic growth is envisaged in this area whereas there are very few Indian providers with the requisite capabilities or the focus. Some of the key growth areas within e-learning in the K-12 content creation include: Educational games 3D animated content Interactive chalkboards Computer/web-based training  Simulation and game-based learning. Though offshoring in the educational publishing segment is yet to evolve, there are instances of Indian providers providing services like multimedia content development, localization of content across geographies and designing illustrations. There is now a growing trend among U.S.A.- and U.K.-based publishers toward offshoring content services that is driven not just by cost advantage but also by an increasing comfort with service provider capabilities. The publishing offshoring industry as a whole is demonstrating an increasing level of automation, provider maturity and ability to offer higher value services. This trend will continue as providers further refine processes as well as add new higher-value service offerings. Apart from content services, customers are already beginning to entrust more project-management services to providers. The next few years will see new providers entering the content-creation business and the existing providers vying to provide end-to-end services to customers.