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MENA, South-east Asia Emerging Major Offshoring Sites

For the first time since the introduction of A.T. Kearney’s Global Services Location Index, or GSLI, in 2004, Egypt, Jordan and Vietnam ranked in the index’s Top 10 sites for the offshoring business. Egypt came in 6^th place, Jordan at 9^th place, and Vietnam in 10^th place.

India, China and Malaysia, kept their posts as the top three offshoring destinations. These three countries continued to lead the index by a wide margin due to its high people skills, favorable business environment and low cost. Three other Southeast Asian countries made it to the Top 10 with Thailand ranking 4^th, Indonesia 5^th, and Philippines at 7^th place.

Central European countries such as Poland, Czech Republic, Hungary and Slovakia, for years, the favorite offshoring sites for Western European companies, have fallen significantly from the ranks as their costs increased.

The GSLI analyses and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centers and back-office support. Each country is weighed based on 43 measures, including, financial attractiveness, people and skills availability, and business environment.

“The dynamics of global offshoring are clearly shifting as companies re-evaluate the political risks, labor arbitrage and skill requirements in the context of the likely aftermath of the global economic crisis,” said Paul Laudicina, A.T. Kearney chairman and managing officer.

One of the key findings in the GSLI is that the Middle East and North Africa region 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, Tunisia was ranked 17^th, UAE, 29^th, and Morocco at 30^th.

“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.

Sub-Saharan Africa also showed strength. Ghana ranked 15^th, Mauritius 25^th, Senegal 26^th and 
South Africa 39^th.

Countries in Latin America and the Caribbean continued 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 favorable 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.

The United States, as represented by the onshoring potential of smaller cities such as San Antonio in Texas, 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

· rocel@khaleejtimes.com