A.T. Kearney's Global Services Location Index™ (GSLI) offers a snapshot for business leaders who must choose among a growing number of offshore locations, and the policymakers who seek to influence their decisions. Established in 2004, the GSLI analyzes and ranks the top 50 countries worldwide as the best destinations for providing outsourcing activities, including IT services and support, contact centers and back-office support.
Offshoring Opportunities Amid Economic TurbulenceThe A.T. Kearney Global Services Location Index™, 2011
A.T. Kearney’s 2011 Global Services Location Index finds that wage changes and currency shifts from the financial crisis have led to major changes in rankings within the Index. However, the top three countries have demonstrated remarkable staying power. Thanks to their deep talent pools and cost advantages, India, China and Malaysia have been first, second and third, respectively, since the inception of the Index. Formerly lower ranked states with highly qualified labor once again became viable options amid currency devaluation.
Highlights of the 2011 Index include:
- Asia dominates the top 10 positions on the Global Services Location Index, with the leaders once again India (1), China (2) and Malaysia (3), as well as Indonesia (5), Thailand (7), Vietnam (8) and the Philippines (9). The different strengths of these countries vary from India, with a deep and broad skill base, to Vietnam, which ranks as the most financially competitive country in the Index.
- The Middle East and North Africa have become increasingly attractive because of their proximity to Europe and vast talent pool. Egypt is the leader in the region and 4th worldwide; however, the rankings were made before the recent political unrest began. As a result, the political uncertainty and country risk associated with Egypt have dramatically increased and the situation needs to be closely monitored to gauge whether the long-term risk profile will change. The United Arab Emirates climbed to 15th overall, serving as a regional services hub.
- While many European countries were badly hurt by the financial crisis, Estonia (11), Latvia (13) and Lithuania (14) saw their ratings climb as a result. While hit as severely as many Eurozone countries, they engaged in a process of “internal devaluation,” cutting wages and expenditures, and as a result were able to offer highly competitive cost structures. The UK as well was able to benefit from a sharp drop in wages, and climbed to 16th in the ratings from 31st in 2009.
- While the United States is the top customer for outsourcing services, accounting for 63 percent of global IT outsourcing spending, its tier-2 locations rank 18th as outsourcing locations, thanks to a combination of talent and accessibility. Meanwhile, Canada has seen its cost advantage diminish, and it has fallen in the ranking to 39th.
- Latin America continues to serve the U.S. market well and is expected to grow in importance. This year, Mexico, in 6th place worldwide, leads the region, due to a sharp drop in wages over the year, the increased attractiveness of “near-shoring,” and a well-developed talent pool. Chile dropped to 10th place from 8th, while Brazil was number 12 for the second straight year.
See the complete report for a breakdown of the results by region and the full rankings.
Shifting Global Business Environment Reshuffles the Deck for Global Offshoring Destinations: A.T. Kearney Study2 February 2011
While a sluggish recovery continues to create the kind of pressure for economies that drive business outsourcing, an increasingly complex global economic environment has led to major changes in the ranking of the most attractive offshoring destinations, according to the most recent edition of global management consulting firm A.T. Kearney's Global Services Location Index.
- GBPC Quarterly
- Issue Papers and Perspectives
- Research Studies
- Global Business Drivers
- Realignment of Global Supply Chain
- Economic Shift from Global North to South
- More Inclusive Globalization
- Changing Global Governance
- Elevated Financial Volatility and Risk
- New Models of Consumer Engagement
- The Insatiable Consumer
- New Era of Squeezed Profitability
- War for Talent
- Growing Infrastructure Needs
- Changing Role of Government
- Rising Geopolitical Instability
- Depleting Natural Resources
- Responding to the Sustainability Challenge
- New Paradigms in Product Design & Manufacturing
- New and Innovative R&D Models