Asia Pacific’s Dominance in Offshore Locations for Business Services: Insights from Kearney’s 2023 GSLI

Global management consultancy Kearney has released its 2023 Global Services Location Index (GSLI), unveiling the most appealing offshore destinations for global companies. The report highlights the growing significance of Asia Pacific (APAC) countries, with eight, including Vietnam, securing positions in the top 15.

In a world where businesses constantly seek cost-effective and efficient solutions, the APAC region has emerged as a powerhouse for offshore services. This blog aims to delve into the insights provided by the GSLI, placing a particular focus on the prominence of APAC nations. Notably, 8 nations, including Vietnam, have strategically positioned themselves in the top 15, further cementing their allure as prime offshore service destinations.

The Global Services Location Index:

Kearney’s GSLI evaluates 78 countries based on 52 metrics across 4 dimensions: financial attractiveness, people skills and availability, business environment, and digital resonance. This comprehensive analysis provides valuable insights into the factors that make a country an attractive location for offshore services.

It reflects a growing pattern in which businesses are expanding the delivery of services such as information technology, business process outsourcing (BPO), and engineering beyond national borders. Companies are driven by the goal of cost reduction, talent scalability, and heightened efficiency achieved through harnessing the capabilities of a global talent pool.

APAC Leading the Way:

India, China, and Malaysia maintain their stronghold as the top 3 destinations, leveraging cost advantages, abundant talent, and robust skills. Meanwhile, Indonesia, Vietnam, Thailand, the Philippines, and Singapore are ranked among the top 15. Singapore jumped 24 ranks from 38th to 14th in this year’s rank, the highest leap by any country. This report positions Singapore as a focal point for establishing innovation hubs, particularly in the realm of digital skills and talent regeneration.

Top 10 Countries in the 2023 GSLI

In the era of Industry 4.0, where demand for future skills and jobs is reshaped, APAC countries maintain their positions due to their adeptness in talent regeneration. The report identifies this as the most significant gamechanger, enabling countries to stay ahead of the curve.

The GSLI report also introduces a talent regeneration matrix, assessing the capacity and maturity of countries in terms of talent regeneration. Singapore, India, and China stand out, and are projected to lead the world in terms of the availability of a tech-enabled workforce. As digital technologies advance, countries must invest in talent regeneration to stay competitive.

Talent Regeneration matrix of the top 25 countries on the GSLI

A closer look at the GSLI rankings for a few individual APAC countries reveals key insights:

• India (GSLI rank 1): A traditional leader in outsourcing, India focuses on upskilling its workforce in emerging technologies such as AI, ML, and data processing.
• China (GSLI rank 2): A tech leader, China emphasizes self-sufficiency and has a strong focus on digital skills enhancement, though it faces challenges due to an aging population.
• Malaysia (GSLI rank 3): With a focus on building digital skills, Malaysia benefits from government support and public–private partnerships to narrow the skills gap.
• Vietnam (GSLI rank 7): Continues to be a robust outsourcing destination in Asia. The existence of prominent technology companies indicates its status as a global digital hub, compelling the nation to persist in enhancing the skills of its workforce.
• Singapore (GSLI rank 14): Jumping 24 spots, Singapore’s digital resonance and innovation capabilities contribute to its rising prominence.

Conclusion:

The 2023 GSLI underscores the continued strength of APAC countries as leading offshore service destinations. In an era of technological disruption, talent regeneration emerges as a critical factor for sustained attractiveness. As businesses adapt to Industry 4.0, the ability to reskill and redeploy the workforce will be a defining factor for countries seeking to consistently stay ahead of the curve. Access the full report, Regenerative talent pools – Kearney, for further details.