.India is miles ahead of the rest when it comes to its popularity as a offshoring destination. China is making progress, but so far India has managed to keep the threat at bay.
Although the top order looks pretty much settled the dynamics of lower order are visibly changing.
According to A.T. Kearney’s Global Services Location Index 2009 (GSLI), a ranking of the most attractive offshoring destinations, Central/Eastern Europe is falling off the radar while Southeast Asia and Middle East countries are gaining popularity.
Following are the current 2009 rankings of top 50 most preferred Outsourcing destinations in the world
(Current Ranking, Country Name and 2007 ranking in parenthesis. The Green denotes countries that have risen compared to 2007 and Reds have fallen. Blacks are the ones who have held their position)
- India (position in 2007 GSLI: 1)
- China (2)
- Malaysia (3)
- Thailand (4)
- Indonesia(6)
- Egypt (13)
- Philippines (8)
- Chile (7)
- Jordan (14)
- Vietnam (19)
- Mexico (10)
- Brazil (5)
- Bulgaria (9)
- United States (Tier II)* (21)
- Ghana (27)
- Sri Lanka (29)
- Tunisia (26)
- Estonia (15)
- Romania (33)
- Pakistan (30)
- Lithuania (28)
- Latvia (17)
- Costa Rica (34)
- Jamaica (32)
- Mauritius (25)
- Senegal (39)
- Argentina (23)
- Canada (35)
- United Arab Emirates (20)
- Morocco (36)
- United Kingdom (Tier II)* (42)
- Czech Republic (16)
- Russia (37)
- Germany (Tier II)* (40)
- Singapore (11)
- Uruguay (22)
- Hungary (24)
- Poland (18)
- South Africa (31)
- Slovakia (12)
- France (Tier II)* (48)
- Ukraine (47)
- Panama (41)
- Turkey (49)
- Spain (43)
- New Zealand (44)
- Australia (45)
- Ireland (50)
- Israel (38)
- Portugal (46)
The top half has changed a lot compared to bottom half in matter of 2 years, whereas the top 4 popular destinations have managed to stay where they are.
Highlights from 2009 GSLI survey include:
- The Middle East and North Africa is emerging as a key offshoring region because of its large, well educated population and its proximity to Europe. In addition to Egypt and Jordan, ranked at sixth and ninth, respectively, Tunisia (17th), United Arab Emirates (29th) and Morocco (30th) all rank among in the GSLI’s top 30 countries.
“The Middle East and Africa area has the potential to redraw the offshoring map and in the process bring much needed opportunities for its large, underemployed educated class,” said Johan Gott, project manager for the Global Services Location Index. - Saharan Africa also showed strength. Ghana ranked 15th, Mauritius 25th, Senegal 26th and South Africa 39th.
- Countries in Latin America and the Caribbean continue to capitalize on their proximity to the United States as nearshore destinations. Chile placed highest among countries from the region, ranking 8th on the strength of its political stability and favourable business environment. Other strong performers in the region include Mexico (11th), Brazil (12th) and Jamaica, which rose 11 places to rank 23rd.
- India, China and Malaysia continue to lead the index by a wide margin through a unique combination of high people skills, favourable business environment and low cost. In particular, India has remained at the forefront of the outsourcing industry and actually has become an enabler for industry growth through expansion of Indian offshoring firms into other countries.
- The United States, as represented by the onshoring potential of smaller “tier II” cities such as San Antonio, rose to 14th in the rankings due to the financial benefits of a falling dollar. The country is the leader in the people skills category and the combination of rising unemployment and political pressure to create jobs is increasing interest in onshoring possibilities among smaller inland locations. Similar trends are evident in the UK, France and Germany, all of which also rose in the GSLI.
- While the global financial crisis has slowed recent offshoring moves, the percentage of companies’ staff offshore may very well increase as a result of the crisis. Layoffs at home are not translating to layoffs among offshore workers as companies seek to maintain service but reduce costs. Additionally, offshore facilities tend to be more efficient because they are newer and lack years of inefficiencies often built up in onshore facilities.
I don’t see India falling from its position for atleast next 7-10 years, but global dynamics change very fast and you can never say for sure whats going to happen !
What is your view? How long can Indian hold its top Outsourcing Destination slot?
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Indian companies have achieved to a large extent over the past five-odd years is to establish and prove that IT outsourcing to remote locations is both feasible and makes strong economic sense. I think India will retain the top position.
US over a period of time has saved 70% of the labor cost by outsourcing to India.With the improving communication and mature market in India,outsourcing to India is a journey but not a destination.With the world opening up and globalization all over,India could be another Chile and replaced by some other cheaper country after few years down the line.
Pakistan has shown a great progress in many Industries in recent years and IT is one of them. Pakistan is providing quality software development services to many countries, due to rapid increase in highly qualified professionals in IT Industry
I think India has attained it’s position as no#1 outsourcing country is because of the very cheap labor cost almost 1/2 of the rate in U.S labor. And because of the recession, most western country companies have outsourced their work loads to save money. Nevertheless, personally, in 5-7 years more, when the stocks have recovered, outsourcing would probably be in a lesser demand.
im just very shocked to know that malaysia is Top Three, I think people there have this very strong malaysian accent (basically because malaysia is a bahasa speaking country), i had an experience to call to a customer service center agent from malaysia, i asked about my credit account, unfortunately she was not able to help me…Philippines is a country that is full of good english speakers, honestly, even native fiipino can speak fluent english
YEah, it think the basic reason why india ranked one is because it is cheaper to invest there, but in terms of quality of customer service and call centre approach, i prefer asian countries like philippines and china,…Philippines is indeed full of good english speakers, because thier 2nd basic language is English, and almost all means of communication there are translated in english, no wonder philippines will have the chance to be on top
So, how about China then? Do they have a good english pronounciation?
Guys, its decided base on many factors.
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“India, China and Malaysia continue to lead the index by a wide margin through a unique combination of high people skills, favourable business environment and low cost”
If english accent is the main factor, i favour Canada and New Zealand to be on the top list.
At this point, as the Canadian dollar is worth more than the U.S. dollar, Canada is no longer considered for outsourcing of U.S. business. At the rate of the dollar, business is being done locally or offshore from what I’m seeing. This was different when the Canadian dollar was much less but now it has changed. In this case, we Canadians hope our dollar gets weaker to compete in the outsourcing market.
I think the Philippines is on the right track, from number 8 to number 7, and not for long this ranking would go up given the fact that outsourcing providers here are so focused on delivering the most competent service an international client could ever imagine.
Yes i definitely agree with Dariusz..
Philippines definitely the best and biggest supplier of outsourcing business surpassing India, it is because of many factors.. one of it is because of American affinity with it’s culture and with american speaking influences to their society and also, Philippines is a very multicultural country that loves foreigners coming in to their land, with almost all people in their country loves to work overseas.. surely they must have been well adaptable people to work with..
I agree with Ed because I have been working from one of the IT Outsourcing Agency found in the Philippines which is zylun.com. And I have find out that we are performing to the top of the rank because mostly as generalize we are hitting the top 10 IT Outsourcing countries.
An update of the list would have shown how aggressively Bangladesh has improved over the last few years. They are in top three now and is a strong candidate for the top position.
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