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Friday, April 30, 2004
Kearney's 2004 index study underscores the fact that countries to which white collar jobs are being offshored offer a range of attractions besides low-cost labor, creating a complex decision-making process for companies selecting offshore locations. Countries such as India and China, with large populations, offer an abundance of educated workers. But at the other end of the spectrum, "small, highly developed economies like Singapore, New Zealand and Ireland offer excellent infrastructure, education systems and business-friendly low-risk environments," the study says. Surprisingly, the report says Singapore is more competitive than India or Malaysia when it comes to high-end requirements. He points to Singapore's superior telecommunications and IT infrastructure, transparent financial markets, clean legal regime, and the availability of a strong pool of middle and senior management personnel. "Singapore also has tremendous risk mitigation management and containing expertise," he says. All of these can substantially offset Singapore's higher wage levels, he feels.Malaysia is a surprise at No. 3 in the Kearney index. Its population of 22 million people does not allow it to compete with India and China's scale advantages, but there are other factors that work in its favor, the study says. "Low costs, particularly for infrastructure, the most attractive business environment among emerging markets, and high levels of global integration helped Malaysia reach the number three spot in this year's index." Malaysia's government is also promoting the IT and services sector. All that, the authors say, will make Malaysia "one of the strongest competitors to India's BPO dominance in the next five years."China may trail India in BPO experience and qualifications, but its cost advantages and large educated labor pool are big strengths. China also is emerging as a growing offshore destination for Japanese and Korean companies, and it attracts U.S. and other multinationals "because of talented work force," India too has worked on its competitive strengths. "India has extended a significant lead through its continuing cost advantages and its increasing market maturity,". Overall a well researched report.
