What are challenges that this emerging KPO industry might face in the near future?

I think they require higher quality standards because the stakes for the clients are high. Furthermore, the clients are likely to be apprehensive about the quality of services delivered (especially in view of the fact that these services are being provided by low-cost destinations) and these may be difficult to alleviate.

In some cases, investment in KPO infrastructure is expected to be higher than that in traditional BPO. For example, a company involved in Simulation and Finite Element Analysis will require high-end workstations, whereas one involved in simple data collection, sorting, and analysis may require moderate capital. Similarly, contract research organizations are likely to require higher amounts of capital.

KPO projects require a higher level of control, confidentiality and enhanced risk management. Laxity in any of these parameters will not only jeopardize the KPO services being provided, but may also affect the entire business conducted by the client.

Many may say that the India will become developed nation soon and they may show our GDP, growth of stock market, exports led by exports by the foreign companies in India, the salaries, the life style etc., but, the real development lies in our R & D capabilities. Still, we are far behind when it comes to research and development and we no where near the developed world in this regard. We are not encouaring research and there are no much results. Our former president kalam says that "the knowledge is most powerful and the tangible asset". But, still, we neglect that whatever the reason may be. We concentrate on earning than a quest for knowledge and job satisfaction. We need to change this attitudes. Goverment should do alot to develop our R & D capabilities. We should not be simply employees to the US and US companies serving them alwyas. They invent something and we will learn how to use that invention and make money. I think its the fact. The rise of KPO industry employing only Indians will be growth of our country and I think its true. We have to hurt for talent now days and its biggest challenge for the KPO industry.