On September 18, A.T. Kearney released its 2017 Global Services Location Index™ (GSLI), a study that analyzes and tracks the contours of the offshoring landscape in 55 countries across three major categories: financial attractiveness, people skills and availability, and business environment. The index helps companies decide where to locate offshore operations, particularly in the business process outsourcing (BPO) arena.
“Though the top three countries have remained in the same order every year since the study’s inception in 2004, we have begun to see a widening gap between #1-ranked India and all the rest, starting with a significantly larger lead over the country ranked second, China,” notes Arjun Sethi, partner and global head of A.T. Kearney’s Digital Transformation Practice and co-author of the study. “But we are now far enough into the trend toward automation to see that substantial job loss is inevitable in all countries involved in the BPO industry, as hundreds of thousands of low-skilled and repetitive jobs are replaced by automation.”
“What’s new in this year’s findings is that we see the effects of automation hitting white-collar service profession jobs,” said Johan Gott, A.T. Kearney principal and co-author of the study. “Lower-cost nations have experienced tremendous increases in high-quality employment and transformational economic growth in recent years. Indeed, this has been a large part of their economic development strategy. But now, automation is reversing the flow of countries such as India and the Philippines, which have benefited from labor arbitrage. Our goal is to help companies make sound decisions about which pieces of the activity value chain should use automation and on retooling people into higher-paid jobs.”
2017 GSLI Highlights
- India, China, and Malaysia are once again the top-ranked offshoring destinations, with India pulling way ahead of all other countries.
- Indonesia and Brazil have swapped rankings for 4th and 5th position respectively.
- Mexico fell out of the top 10, while the United Kingdom moves into the top 20, and Peru leapfrogs 27 spots to #20.
- The bigger news, however, is the massive job loss as a result of automation. The study estimates only one new position will be created for every four that are lost.
2017 GSLI Rankings and Changes from 2016
