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| 1 minute read

Globalisation isn't dying, as the boom in tech-enabled services trade shows

We often hear that "globalisation is dead" but, as this FT article argues, it's merely changing shape. While growth in international trade of goods has slowed down, trade in services - specifically, distance services like IT support or business process offshoring - is growing exponentially.

This fits in with the large-scale Business Process Outsourcing projects we have been advising on in the aftermath of the pandemic.  After all, offshoring white-collar tasks is just the latest example of labour cost arbitrage, which global corporations are leveraging in order to reduce cost base and improve operations as they focus on their core business.  

At the same time, we see BPO competing more and more with AI and Automation, certainly at the lower end. Essentially, large corporates have a choice in how they streamline their operations - offshore to third party expert providers like Genpact and Infosys in Bangalore or Manila, or implement better cloud-based architecture through Robotic Process Automation developers like Blue Prism.  

In my view, what is more likely to emerge is a hybrid. The big global BPO suppliers are well placed to invest in underlying technologies - a core platform based on RPA and AI - around which they will provide a vital service "wrapper" of skilled architects, engineers and accounts people to implement, maintain and offer customer support.

For lawyers and advisers, that will mean running procurements with a firm eye on purchasing an important technology platform (often a strategic licence agreement) and the related services required to deploy and support it (often a full-form services or outsourcing agreement). The challenge is to ensure those pieces "fit" seamlessly, both contractually and in delivery, to ensure the buy-side objectives are achieved.

“Globalisation is not dead. It may not even be dying. But it is changing.” Among the most important ways in which it is changing is via the growth of services provided at a distance.

Tags

it and digital, artificial intelligence, digital transformation