Asia Pacific Countries Shine As Potential Offshore Destinations For Global Companies In Kearney's Global Services Location Index

(MENAFN- media OutReach Newswire)

• Eight Asia Pacific countries place in the top 15 as the most attractive destinations for offshore services globally.

• 2023 index focuses on talent regeneration and digital skills, bringing Singapore into the limelight as APAC's emerging technology destination for establishing innovation hubs.

SINGAPORE - media outreach - 8 August 2023 - Global management consultancy Kearney has published its 2023 global services location index (gsli) that studies the critical factors that make countries attractive as potential locations for offshore services.

In an era of rapidly evolving global business landscapes, business services like information technology, business process outsourcing (BPO), and engineering are increasingly being delivered across borders as companies seek to reduce costs, scale talent, and increase efficiency by utilizing the global talent base. In the current climate, Asia Pacific (APAC) markets shine as potential offshore service destinations, with India, China and Malaysia continuing to lead the index as the top three destinations respectively.

The GSLI ranks 78 countries based on 52 metrics that cover four dimensions including financial attractiveness, people skill and availability, business environment, and digital resonance.

Strong outlook for APAC

Continuing their strong showing in GSLI 2021, APAC countries lead this year's Index, with India, China and Malaysia in the top three largely due to cost advantage, talent availability, and strong skills. Meanwhile, Indonesia, Vietnam, Thailand, the Philippines, and Singapore are ranked among the top 15. Singapore jumps 24 ranks from 38th to 14th in this year's rank, the highest leap by any country.

A breakdown of the performance of APAC countries within the GSLI, namely India, China, Malaysia, Indonesia, Vietnam, Thailand, the Philippines, and Singapore can be found in the appendix.


2023 GSLI APAC Rankings
"Geopolitical, economic, and technological forces have spurred significant changes in the global labor market. Therefore, a country's ability to reskill and redeploy its workforce in response to changing market demands and technological disruptions is key to improving its attractiveness as an offshore location for business services," says Arjun Sethi, Kearney's Global Vice Chair of Digital Transformation, Regional Head and Chairman of Kearney's APAC Region, and co-author of the 2023 GSLI report. " Talent regeneration will be the most crucial gamechanger as Industry 4.0 continues to reshape the demand for future skills and jobs. And this is what has kept the top three countries – India, China and Malaysia – solid in the Index for a few years now, while the rest have been fairly fluid in their positions." Adding on he said, "So in a nutshell, while building regenerative talent pools, everything, everywhere, all at once, is what a country should seek to achieve - to consistently stay ahead of the curve."

Talent regeneration key for continued attraction

A key trend emphasized in this year's report is the importance of talent regeneration - a country's ability to rapidly reskill and redeploy its workforce in response to changing market demands and technological disruptions to maintain and enhance its attractiveness as an offshore location.

With the emergence and adoption of digital technologies, cost-centric service locations are at risk of losing their competitiveness to more developed and technologically advanced countries as more work and processes will be automated. Talent regeneration, therefore, will serve as the backbone of this shift.

Through a talent regeneration matrix, this year's report shows the talent regeneration capacity and maturity of countries. Singapore shines as APAC and Southeast Asia's premier emerging technology destination and innovation hub. India and China also exhibit strong talent regeneration and are projected to lead the world in terms of the availability of a tech-enabled workforce. Additionally, traditional offshoring leaders in the region such as India, China, Malaysia, Indonesia, Vietnam and Thailand will need to invest heavily in talent regeneration as the labor cost advantage becomes less relevant given the technological disruptions and socioeconomic factors.

About the 2023 Kearney Global Service Locations Index

The 78 countries in the 2023 Global Services Location Index were selected based on corporate input, current remote services activity, and government initiatives to promote the sector. They were evaluated against 52 metrics across four major categories: financial attractiveness, people skills and availability, business environment, and digital resonance. This year, Kearney refocused the Index to be more forward-looking and captured digital resonance and talent regenerative capabilities and availability. In the process, a few metrics were dropped from the people skills availability and digital resonance pillars that were focusing on traditional IT, and new digitally focused parameters were added. This along with global trends and key local disruptors led to marked differences in some countries' rankings.

To access the report, click here
Hashtag: #Kearney #GlobalServicesLocationIndex
The issuer is solely responsible for the content of this announcement. About Kearney Kearney is a leading global management consulting firm. For nearly 100 years, we have been a trusted advisor to C-suites, government bodies, and nonprofit organizations. Our people make us who we are. Driven to be the difference between a big idea and making it happen, we help our clients break through.
Appendix: Assessment of APAC Countries in 2023 GSLI India (GSLI rank 1) is a traditional leader in outsourcing because the country has a skilled workforce at a low cost. Demand is booming for AI, ML, and data processing skills, which are expected to be the top technologies in the next five to 10 years. Seizing the opportunity, the government has launched programs such as PM Kaushal Vikas Yojana 4.0 to upskill 4.7 million people on i4.0 technologies such as AI, 3D printing, drones, and the Internet of Things (IoT). To keep the momentum, India is building on its strong science, technology, engineering, and math (STEM) backbone and educating young students on crypto, AI, and other new-age technologies under the National Education Policy 2020. The new National Data Governance Policy will strengthen India as a high-skill, low- to mid-cost market and fulfill the vision to "Make AI in India."

China (GSLI rank 2) is a tech leader focusing on self-sufficiency amid the tech stack wars with the west. A leader in filing tech-based patents on AI, ML, quantum computing, blockchain, and cloud, China's economy is leading in the adoption of digitalization with a strong focus on digital skills enhancement. The nation is building a strong STEM education system by introducing emerging technologies such as AI, analytics, and 3D design along with high cognitive, social, and emotional skills at an early stage. In addition, many application-oriented universities are open to flexible paths, such as the "3+4" program. In 2021, more than 300 universities offered full-time courses in AI. The government is also working with employers to develop industry-specific frameworks that identify the skills that workers need to succeed in each industry, and employers are investing in training and development to keep their employees up to date on the latest technologies and trends. Strong PISA statistics and a variety of industry and academia partnerships are keeping the momentum going. Despite government-funded and public–private initiatives to develop digital skills, China is facing an uncertain workforce size in the mid and long term because of its aging population and low birth rate. The one-child act has been a major contributing factor to the flattening and contracting of China's population.

Malaysia (GSLI rank 3) benefits from a strong focus on building digital skills, the adoption of emerging technologies, and government support for developing digital skills. A workforce equipped with advanced digital skills such as cloud architecture, analytics, AI, and software development contributes an estimated $105.7 billion a year to the country's GDP. Already a hub for top companies, Malaysia's digital economy has initiatives to help tech start-ups integrate across the region, and the country is making investments to attract Fortune 500 tech companies to create high-value jobs. The country is also banking on public–private partnerships to narrow the skills gap and achieve the goals of its transformative Malaysia 5.0 initiative while also fulfilling initiatives such as the #MyDigitalMaker Movement, eUsahawan, Premier Digital Tech Institute, and Digital Skills Training Directory to upskill and reskill its population.

Indonesia (GSLI rank 6) has a massive workforce of about 135 million people, but there is a shortage of skilled workers. Only 40 percent of the workforce has the skills needed to work with emerging technologies, which led to it slipping two spots on this year's GSLI. Indonesia's emerging focus on digital skills enhancement is helping it resurge, with IT behemoths expressing interest in investing in the digital economy because of its cost-effectiveness. The central government in Jakarta has been seeking support from US and Japanese decision-makers to make Indonesia a corporate relocation center. The government is prioritizing vocational training to strengthen skills and has launched Kartu Prakerja, a digital adult learning program.

Vietnam (GSLI rank 7) remains a strong Asian outsourcing destination. The presence of major technology companies demonstrates that the country is a global digital hub, motivating it to continue upskilling its workforce.

Thailand (GSLI rank 9) jumped one spot on the back of its financial attractiveness and business environment. Its future lies in capitalizing on its population's digital skills to become an innovation hub. Thailand's digital transformation efforts have been intensifying, with the Ministry of Labor partnering with public firms to upskill about 4 million digital citizens and launching a Smart Skills program to provide access to online courses on digital skills such as IT support and data analytics.

The Philippines (GSLI rank 12) continues to be the business process outsourcing (BPO) engine of Asia: it is home to more than 1,000 BPO companies with nearly 1.2 million employees. However, it slipped three spots in this year's GSLI, primarily because of the rise of Mexico and Colombia as nearshore capability centers with proximity to the United States. With growing demand for technologies such as AI, ML, the IoT, and automation, the demand for a skilled workforce is also growing. To seize this opportunity, the government offers the Technical Education and Skills Development Authority and a wide range of courses in the BPO sector-from basic customer service to more specialized knowledge such as data analysis and cloud computing. In 2022, Digital Edge debuted in the market by launching a data center there, helping to bridge the digital divide in Southeast Asia's most dynamic countries.

Singapore (GSLI rank 14) jumped 24 spots, primarily because of its digital resonance and capabilities to foster innovation, which is reflected in the country's thriving tech-based start-up ecosystem. Its tech economy will need another 1.2 million digitally skilled workers by 2025, and with demand growing, the need for a suitable workforce will also grow. To meet this demand, the government is working through research, innovation, and enterprise plans, including a $19 billion investment over a five-year period to advance its R&D landscape. Singapore is investing in training programs and initiatives to help workers develop their skills and in support initiatives such as SkillsFuture Singapore, TechSkills Accelerator, and Industry Transformation Maps. Private-sector firms are also investing in the development of a skilled workforce, and many private collaborations are aimed at upscaling private companies and educational institutions.

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