Top 50 Outsourcing Destinations in the world

.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.

(source)

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)

1. India (position in 2007 GSLI: 1)
2. China (2)
3. Malaysia (3)
4. Thailand (4)
5. Indonesia(6)
6. Egypt (13)
7. Philippines (8)
8. Chile (7)
9. Jordan (14)
10. Vietnam (19)
11. Mexico (10)
12. Brazil (5)
13. Bulgaria (9)
14. United States (Tier II)* (21)
15. Ghana (27)
16. Sri Lanka (29)
17. Tunisia (26)
18. Estonia (15)
19. Romania (33)
20. Pakistan (30)
21. Lithuania (28)
22. Latvia (17)
23. Costa Rica (34)
24. Jamaica (32)
25. Mauritius (25)
26. Senegal (39)
27. Argentina (23)
28. Canada (35)
29. United Arab Emirates (20)
30. Morocco (36)
31. United Kingdom (Tier II)* (42)
32. Czech Republic (16)
33. Russia (37)
34. Germany (Tier II)* (40)
35. Singapore (11)
36. Uruguay (22)
37. Hungary (24)
38. Poland (18)
39. South Africa (31)
40. Slovakia (12)
41. France (Tier II)* (48)
42. Ukraine (47)
43. Panama (41)
44. Turkey (49)
45. Spain (43)
46. New Zealand (44)
47. Australia (45)
48. Ireland (50)
49. Israel (38)
50. 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 (17^th), United Arab Emirates (29^th) and Morocco (30^th) 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 15^th, Mauritius 25^th, Senegal 26th and South Africa 39^th.
• 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 8^th on the strength of its political stability and favourable business environment. Other strong performers in the region include Mexico (11^th), Brazil (12^th) and Jamaica, which rose 11 places to rank 23^rd.
• 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 14^th 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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Author: Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.

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