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Egypt, Mexico move up outsourcing list amid unrest, violence

Stephanie Overby | Feb. 8, 2011
A.T. Kearney's just-released Global Services Location Index ranks Egypt and Mexico the fourth and sixth most attractive countries for offshore outsourcing. India and China hold on to the top two spots.

Hard times led to some big gains for a number of countries on the list. The United Kingdom, Poland, Latvia, Russia and the United Arab Emirates moved up the most on this year's list but may slip again in coming years. "I'd be careful in terms of looking at these as necessarily permanent shifts. Some of them are due to pretty large currency movements or how the financial crisis hit these countries," Gott says. "If and when we exit the crisis, we're going to see [their] wage levels moving up."

Other countries looking much less attractive this year to outsourcing customers include Canada (AMR), Jordan, Ghana and Jamaica.

Because cost cutting is usually the primary driver for offshoring, financial factors constitute 40 percent of the total weight of A.T. Kearney's country rankings, with people skills and availability and business environment constituting just 30 percent each. But managers of the index have no plans to change those weightings to factor in geopolitical risks (which fall under the business environment category) more heavily.

The index, Gott cautions, should be viewed as a starting point for offshoring location decisions. "It's a good way to short-list some countries, but you have to take that extra step and do your own qualitative research," he says.

A.T. Kearney Index of Most Attractive Countries for Offshore Outsourcing 2011 (Last year's rankings are shown in parentheses.)

1. India (1)
2. China (2)
3. Malaysia (3)
4. Egypt (6 )
5. Indonesia (5)
6. Mexico (11)
7. Thailand (4)
8. Vietnam (10)
9. Philippines (7)
10. Chile (8)
11. Estonia (18)
12. Brazil (12)
13. Latvia (22)
14. Lithuania (21)
15. United Arab Emirates (29)
16. United Kingdom (31)
17. Bulgaria (13)
18. United States (14)
19. Costa Rica (23)
20. Russia (33)
21. Sri Lanka (16)
22. Jordon (9)
23. Tunisia (17)
24. Poland (38)
25. Romania (19)

Source: A.T. Kearney's 2011 Global Services Location Index

 

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