Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, Panama and Uruguay all want a piece of outsourcing services expected to have a value of $450,000 million in Latin America by 2012. Do these countries have the muscle to topple the world's top three outsourcing hubs? A new study says it is a distinct possibility.
The opening line of a new KMPG study reads, "India, China and Malaysia may still be the top three global outsourcing hubs, but they are being challenged by new destinations in Latin America, North Africa and the Middle East." The study, titled, "Nearshore Attraction: Latin America Beckons as a Global Outsourcing Destination," indicates that Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, Panama and Uruguay are building momentum in the outsourcing industry and do have the potential to compete with, or at the very least, complement outsourcing services available in India, China and Malaysia.
Why the sudden interest in Latin America? The outsourcing industry was born when the global economy was flying high and securing lower costs in countries like India and China far outweighed the investments and risks associated with doing business a half a world away. Today, however, in the aftermath of recession, cash-strapped companies are looking for low risk solutions closer to home, and many are placing quality ahead of price.
According to the report, there are several distinct advantages to working with outsourcing partners in Latin America. In addition to Latin America's close physical proximity to the United States, and its similar time zone, the region shares a cultural affinity with the United States -- not to mention the fact that Spanish, after English, is the most widely spoken language in the US. Latin America also offers a modern telecommunications infrastructure, tax incentives in many countries, and a favorable business environment.
