Gartner reveals top 30 offshoring hotspots

The analyst house's 2008 list of the top offshoring destinations reveals new contendors challenging the dominance of India and China

New contenders are emerging to challenge the dominance of Brazil, Russia, India and China in the offshoring market.

While India is the "undisputed leader", followed by China, in the list of the top 30 offshoring destinations, as compiled by analyst house Gartner, this year's list shows Mexico, Poland and Vietnam pushing their way up to take them on.

Ian Marriott, research vice president at Gartner, said these countries would be seeking to take advantage of the credit crisis to capitalise on organisations' drive to save costs.

The four countries from last year's top 30 that dropped out this year are Northern Ireland, Sri Lanka, Turkey and Uruguay, while the new entrants are Egypt, Morocco, Panama and Thailand.

Marriott said the countries that dropped out of the list had not underperformed, but the dynamic nature of the market had seen others making strong progress.

Gartner judged the locations on language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual-property security and privacy.

Strong interest in near-shore locations was a key factor for companies choosing an offshore location, as were language skills, cultural compatibility, time zone and travel time.

The final list includes 13 countries from Europe, the Middle East and Africa, such as the Czech Republic, Poland and Hungary — which were valued for their language skills — and, for the first time, two North African countries.

The trend for countries in Europe being used as near-shore centres for traditional service providers and large Indian providers also continued.

The study found that South America is becoming an attractive proposition for the US, the largest buying market for offshore services, and that they are increasingly valued for their Spanish speaking skills.

Ten countries from Asia-Pacific are represented in the list, in addition to emerging countries such as Malaysia, Pakistan, the Philippines, Thailand and Vietnam — mostly chosen for their attractive costs.