Introduction

The offshoring industry in the developing world is rapidly moving into a higher gear. It started with relatively low-end works such as back-office support, customer service, and data entry. In recent years, developed-world-based firms are increasingly outsourcing more sophisticated work such as computer coding, insurance underwriting, claims processing, and medical transcription to developing economies (Reich, 2005). An estimate suggested that “high-value” business process outsourcing (BPO), such as accounting, paralegal, medical, research, and banking will reach $50 billion by 2010 (Mehta et al., 2006).

Although reflective pieces from the popular press and some academic articles have provided insights into the rapidly growing offshoring industry, there is a dearth of theoretically oriented research on the evolution of a “high-value” BPO industry in emerging economies. To improve our understanding of the development of a “high-value” BPO industry in emerging economies, this chapter focuses on the offshoring of medical transcription services by industrialized-world-based health-care providers to developing economies. In specific terms, we examine the US–India trade in medical transcription services.

Before proceeding, we offer some clarifying definitions. Business process outsourcing (BPO) is defined as long-term contracting of a firm's non-core business processes to an external contract provider (Romberg, 1998). These are non-IT business processes but in most cases are IT-intensive or are facilitated by IT (Kshetri, 2007). Some examples include customer service call centers, tax preparation, medical transcription, finance and accounting, human resources, design and engineering, etc. (The Economist, 2005a). The performance metrics are defined and measurable (Stone, 2004).