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Offshoring: India rules the world
March 15, 2007 15:25 IST
Last Updated: March 15, 2007 16:47 IST
India is the world's leading offshore services location according to the Global Services Location Index, the latest annual survey by global management consulting firm A.T. Kearney.
India, closely followed by China, continues to lead the Index by a wide margin, with declines in cost advantage offset by further improvements in talent supply and business environment.
The survey also indicates that globally the wage cost advantage of offshore locations for office services is set to last for another 20 years.
Even though wages in offshore locations for services, such as IT, business processes and call centres, have started to rise, they will remain cheaper for the foreseeable future under the most aggressive projections of wage inflation and currency appreciation in developing countries.
The labour cost changes are partly the result of accelerating wages and currency appreciation in offshore hotspots, as well as downward pressure on wages in impacted sectors in developed countries.
The Top 50
United Arab Emirates
United States (Tier II)*
Germany (Tier II)*
United Kingdom (Tier II)*
France (Tier II)*
* Based on lower-cost locations in each country: San Antonio (US), Belfast (UK), Leipzig (Germany) and Marseilles (France).
At the same time, key emerging markets have continued to improve their attractiveness in terms of access to talent, industry experience, quality certifications and their regulatory environment.
"What is most striking about the results of this year's Global Services Location Index is how the relative cost advantage of the leading offshore destinations declined almost universally, while their scores for people skills and business environment rose significantly," said Paul Laudicina, managing officer and chairman of A.T. Kearney.