Courtesy of Jason Busch I saw this Supply Management article which identifies Indonesia, Mexico, Vietnam, UAE and Ukraine as the next global hotspots.
When it comes to IT Outsourcing and BPO, I have learned that raw country potential often does not translate to momentum. Each of these countries has some question mark. For Ukraine there are IP concerns not being part of the EU. With Mexico it is English skills. With UAE it is the fact that much of the talent is imported from India, Pakistan, Philippines - so why not just go to the source for that talent? With Indonesia the fear of Islamic fundamentalism has been an issue.
But the biggest gating factor is the absence of a mature supplier pool. Unless buyers are trying to set up their own captive unit in those countries, they look for viable vendors to provide them access to the talent pool. One reason why China, in spite of huge potential, has only been a bit player in ITO and BPO.
I have seen proposals from vendors such as EPAM using Ukraine resources and Softtek using Mexico resources, but there needs to be vibrant vendor community, not just a couple of vendors in a country. I would suggest if India 10 years ago only had a single vendor like Infosys or TCS it would have not become the juggernaut it has with so many other choices such as Satyam, Wipro, HCL and countless others.
What is likely to happen is buyers will encourage their US, European and Indian outsourcers to look at these emerging markets as a diversification strategy. As an example, in the last year Cognizant has opened a Buenos Aires and a Budapest office - encouraged by two of its major clients. Dubai in the UAE is already a regional office for many outsourcers - but used primarily to service the Middle East customer market. I suspect something similar will happen with the other hotspots Supply Chain magazine has identified.
