Ranking the World's Top Outsourcing Destinations

 At the end of last year, "services globalization and investment advisory firm" Tholons released the 2014 edition of its annual outsourcing destination rankings. The rankings have received limited attention outside of business process outsourcing (BPO) hubs, so it's time I brought it to wider attention here. Because of its head start and agglomeration or clustering effects, India still dominates the list. That said, Manila has displaced Mumbai as the #2 rated destination by moving up a place, as has Krakow, Poland which overtook Dublin, Ireland to take #9. Call it the "Catholic Work Ethic" in action once more exemplified by Poland and the Philippines moving up the economic greasy poles in their respective regions.

Speaking of which, what is interesting to me is the emergence of BPO hubs in all regions. (Unfortunately but unsurprisingly Cairo, Egypt takes an 18 place hit due largely to political instability in that country. The entire list linked to above goes to 100 by the way.) To be sure, people are still more likely to deal with those they are more comfortable with. Hence Mandarin speakers congregate around BPO hubs in China which are relatively nearby and thus have similar working hours. A similar phenomenon occurs with Sao Paulo, Brazil and Santiago, Chile being prime Latin American destinations for BPO work. It's certainly a testable hypothesis that BPO work reliant on verbal communication--think contact centers--is more evenly distributed globally than other tasks that do not rely so much on linguistic facility.

Lastly, the criteria which Tholons uses to evaluate various destinations are described as follows, which have both quantitative and qualitative elements. At the end, I have also included slides depicting Tholons' use of these criteria...

[Q]uality and size of the labour market, costs related to conducting business activity in the BPO sector (office area, operational costs, maintenance costs etc.), business environment (investment incentives, investor cooperation), operational environment (transport, technical infrastructure, service accessibility), business risk (political, business, natural and social risk) and quality of life (e.g. healthcare, culture, leisure, free time). In the case of Kraków, the increase in the number and quality of services provided for the benefit of investors was emphasized (advisory services in accounting, finance and resource management).

What's funny to us in Southeast Asia is that ignorant people were surprised the "Flappy Bird" creator Dong Nguyen came from Vietnam when they have a well-established BPO industry there. Indeed, Nguyen's erstwhile day job was in outsourced programming (for tracking taxicabs). As far as these industries go: been there, done that, saw the movie, bought the T-shirt.