Seven Philippine cities have been chosen as top outsourcing destinations in the world but Chinese cities are flexing their muscles for a bigger slice in the market.
Tholons in its 2013 Top 100 Outsourcing Destinations report placed Manila as the third top global outsourcing place after India’s Bangalore and Mumbai while Cebu placed eighth. Five more cities were in the list with Davao, 70th; Sta. Rosa, 84th; Ilioilo, 93rd; Bacolod City, 94th and Baguio City, 99th.
Although the Philippines and India dominate the market, China is fast becoming a choice location. In the Top 100 Outsourcing Destinations report by Tholons, cities such as Shanghai, Beijing, Shenzhen, and Dalian ranked 11, 12, 14, and 15, respectively.
The Information Technology and Business Process Association of the Philippines (IBPAP) noted that China is improving the quality of education , investing in infrastructure and increasing the number of English-speakers in the talent pool.
IBPAP said even countries such as Sri Lanka and Nigeria are also making their bid as IT-BPM hubs.
World Bank data showed that Sri Lanka is rising in the ranks of middle-income countries, maintaining at least 5 percent growth even during three decades of conflict. The poverty rate improved from 15 percent in 2006-2007 to 9 percent in 2009-2010.
SLASSCOM, Sri Lanka’s IT-BPO Knowledge Services industry chamber, expects export revenue to increase by 182 percent—from $213 million in 2007 to approximately $600 million in 2013. The chamber reports that employment grew from 33,000 in 2007 to an estimated 67,000 employees in 2013. The number of companies is expected to reach over 220 in 2013 from 170 in 2007.
Nigeria is similarly keen on its showcasing its potential in Africa and the rest of the world. Even with economic gains, 62.6 percent or roughly 100 million Nigerians still live on less than $1 a day.
The Institute of Software Practitioners of Nigeria (ISPON) views software outsourcing as a strategy to address massive unemployment and “brain drain”. Nigerian overseas workers bring in US$20 billion into the economy, which the industry hopes can be reversed by strengthening the IT outsourcing industry. According to ISPON estimates, Nigeria can generate “over $100 billion if software outsourcing is fully tapped and harnessed.”
In Asia, the Philippines and India remain the top performers in the voice and non-voice sectors, respectively. IT-BPM is now the “highest impact” sector for India, accounting for 8 percent of gross domestic product (GDP), up to 25 percent of exports, and 52 percent of the global sourcing market. The industry is ranked fourth in India’s share of total foreign direct investment (FDI).
In the Philippines in 2012, the industry generated revenues of $13.2 million from voice and non-voice segments and employed 777,000 across the country. The industry road map targets overall revenue of US$25 million by 2016.
“Part of our role is to manage our industry’s potential so that it brings progress to everyone. Because talent is what makes our industry world-class, we are committed to developing our employees as professionals and as individuals,” said Jose Mari Mercado, president and chief executive officer of IBPAP. “Throughout IBPAP’s existence, we have focused on developing the country’s capabilities so that we can employ more Filipinos and enable them to build a bright future without leaving the country.”
Recognizing the industry’s employment-generation potential, the Philippine government has identified IT-BPM among sectors with a crucial role in poverty reduction and inclusive growth. IBPAP aims to train a talent base of 1.1 million over the next four years through industry public-private partnerships.