India and China still top for global sourcing -

Developing countries are leading the way in globally sourced activities.

That's according to Gartner, which has put together a report on the top 30 countries for globally sourced activities in 2010-2011. Within the report it's found that  many organisations which choose to move IT services to lower-cost countries are daunted by the task of determining which country or countries would best host their operations.

“This year the Top 30 countries are exclusively emerging nations,” said Ian Marriott, research vice president at Gartner. ”As the pace of change is slower in developed countries we have chosen to focus on those locations that are still maturing and developing, domestically and internationally.”

Nine countries from Asia/Pacific were represented in the 30 leading countries, compared with 10 in previous years. These include what Gartner describes as the "undisputed leader in offshore services", India, and the "greatest challenger in terms of potential scale", China.

In the Americas region Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and Peru made the list, while the Asia/Pacific regions saw Bangladesh, China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam come in the top 30.

In EMEA Bulgaria, the Czech Republic, Egypt, Hungary, Mauritius, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Turkey and Ukraine are among those listed in the report.

Seven developed countries have moved out of the Top 30 this year. This includes Australia, Canada, Ireland, Israel, New Zealand, Singapore and Spain.

However, Gartner points out that these countries are still important in the context of nearshore locations as their maturity in this industry gave organisations "significant benefits."

Over the past year Gartner said it had seen considerable efforts from many countries to consolidate or grow their positions as leading locations for offshore services. It pointed out that emerging nations had placed significant emphasis on IT and business process services providing a vehicle for economic growth, as many potential trading partners are moving from recession to tentative growth.

This in turn has led to Bangladesh, Bulgaria, Colombia, Mauritius and Peru, along with three re-entrants - Panama, Sri Lanka and Turkey, to move into the Top 30 list.

Gartner points out that this year, eight countries from Latin America appeared in the final list of 30 compared with seven from the Americas as a whole in previous years. However, it said that in the past, a lack of government support for offshore initiatives had restricted development by countries in the Americas. Currently Mexico and Chile are rated “very good” for government support, with Brazil and Costa Rica meriting a “good” rating. 

In the Asia/Pacific region Gartner says government support for promoting their countries as offshore service locations was strong. This was especially evident in India, China and Malaysia.

Indonesia continued to be considered poor for government support.

Gartner says that of the 13 EMEA countries who made the Top 30,  only Egypt achieved a rating higher than “good” for government support. It says this reflects the amount of focus still needed to create an environment that would support nations to become a part of organisations' global delivery models.

“Sourcing managers and service providers should use the various ratings to help determine which locations are right for their individual organisations,” said Mr. Marriott.

“In this increasingly dynamic global environment, multinational providers will continue to extend their footprint in different geographies, carrying with them their expertise and maturity, while local providers will strive to become offshore providers, searching for opportunities and niches they can explore. Even though some countries are rated poorly for some categories, clients may find individual providers — global and local — whose capabilities mitigate some of the risks.”