Outsourcing: New Era for Emerging Markets

By Sanghita Dey, Staff Writer

“Do you need sponsorship?” was the question I was most often asked at  NSHMBA 2015. It was the same at almost every booth of my target companies. But at one booth, the recruiter asked me if I was willing to move to a developing country for an internship. Similarly, United Technologies asked me to apply for projects in Chile. I thought that the immigration rules of US make recruiters ask for alternatives but my conversation with Mr. Daniel – an Accenture recruiter – gave me the insight on how projects and R&D are outsourced to developing countries for efficient IT solutions as well as low-cost labour. For example, Accenture is expanding its operations in Timisoara, Romania for their software development and hiring a huge number of employees.

Accenture is not the only case; several MNCs are either shifting their R&D or outsourcing projects to developing countries. Large multinationals are increasingly using a portfolio approach to outsourcing, that combines internal capabilities with consultants, domestic outsourcers, and offshore providers. Meanwhile, public sector outsourcing now accounts for nearly two-thirds of all IT and BPO value annually. According to Information Services Group (ISG) public sector annual contract value currently at $39 billion, has increased 15 percent from last year. The majority of that activity – 69 percent – happened in U.S. and Canada, driven by increased Department of Defence spending and agencies seeking to consolidate data centers and adopt shared services.

India is still leading in the offshore projects. GE has only one R&D center outside US and that is in Bangalore, India. India has become the major R&D hub for Google. According to Zinnov, research and development centres in India contributed $18.3 billion, which is around one-third of the global R&D and services market and Indian engineering R&D services revenue will more than double and reach $38 billion by 2020.


China is the next biggest player after India. Chinese outsourcing providers work with companies from around the world. Many have signed long-term contracts with blue-chip customers, including Microsoft Corp., Hewlett-Packard Co., and Oracle Corp. A McKinsey & Co. survey of 75 Chinese software and IT services companies found that the number of Chinese vendors achieving Capability Maturing Model (CMM) level 4 or 5 certifications growing by about 39 percent each year.

Malaysia, Mexico, Thailand, and Philippines are the next biggest players. Romania, Chile, and Brazil are climbing the ladder very fast. Investor attention regarded Romania a perfect match for information technology outsourcing activities, software development and research programs. The country is becoming leader in IT outsourcing, particularly for chip design, embedded software, and information security. A market overview by Tünde Székely, Publication Chair Romania, German Outsourcing Association and PR Manger at Codespring, Romania claims that Romania is set to claim No. 1 ranking for outsourcing in Europe after constantly climbing in international rankings. Romania is included in the top 10 emerging outsourcing destinations in the Outsourcing Business supplement preceded by Jamaica, Chile, United Kingdom, Ghana and Poland, and followed by South Africa, Russia and Vietnam.

With increase in emerging market, global career opportunities are also increasing. Being international student we should remain open to wider horizons rather than restricting for work authorization in US. Expanding emerging markets provides more challenging careers to exercise our global leadership skills and learn the new outlook of business and technology.

Most recent posts