Singapore:
Asia is the top destination for multinational corporations, with India being the leading country, followed by China and Malaysia, says a study by global management consulting firm AT Kearney.
But the region faces challenges from increasing digitisation and automation, which could negate its cost competitiveness, cautioned the London-headquartered firm in its Global Services Location Index (GSLI) released today.
The GSLI measures the underlying fundamentals of 51 countries based on metrics organised into three major categories: financial attractiveness, people skills and availability, and business environment.
India is unrivalled in both scale and people skills, the study said.
Leading Information Technology services companies in India are expanding their traditional offerings to include R&D, product development, and other niche services, GSLI said.
The study said the line between IT and Business Process Outsourcing (BPO) is blurring as players offer bundles and specialised services to their clients and develop skills in niche domains.
China’s transition to more service-oriented economy is witnessing expansion in advanced analytics and IT offerings backed by government support, it said.
But rising wages in China are limiting cost competitiveness in lower-end functions as compared to India and other Asian destinations, it added.
In high-end IT and analytics, China offers alternative to Eastern Europe, it said, adding that as such, India maintains and even increases its lead over China.
Though hindered by smaller labour pool, Malaysia competes against India and the Philippines with politically stable, multilingual environment at a reasonable cost base, the study said.
Language continues to be a major impediment for Indonesia and Thailand though the two countries benefit from having large well-educated populations and relatively low cost bases, it concluded.
The Philippines is one of the largest off-shoring destinations outside of India.
But the industry is expanding into higher value-added voice services, IT and BPO offerings, said GSLI.
The GSLI, published since 2004, helps companies make key location decisions for off-shoring and industry development projects with objective guidance.
