China’s outsourcing industry continues to perform well; a notable rise was observed in service outsourcing contracts in 2015. Establishment of several new enterprises, incubators, and innovation platforms signaled heightened activity in the technology sector. Tier II cities such as Chengdu are emerging as promising business hubs. However, intensifying restrictive policies on foreign firms is drawing flak from developed nations globally, affecting business sentiments.

With a well-established IT-BPO industry, high provider and process maturity, large talent pool, and strong government support, outsourcing to India continues to be beneficial for clients. However, rising labor costs, high threat of terrorism and social unrest, increasing vulnerability to cyber crimes, lack of adequately skilled graduates, and a big improvement required in its business atmosphere is leading to buyers considering alternative locations.

The Philippine IT-BPM industry continues to flourish, targeting to become the top outsourcer in the Asia-Pacific. Apart from Manila and Cebu, cities such as Clark and Davao have been identified as promising outsourcing locations, offering lower operational costs and better incentives. However, risks such as high cybercrime levels and weak data privacy enforcement, besides continuing natural disaster and security risks like kidnapping and terrorism persist.

Being the only English-speaking country in the Eurozone, Ireland’s outsourcing industry has strong credentials in the BPO and Customer Experience domains. With an already existing strong client portfolio, financial services are another area where the country seeks future investments. Along with strong support from the Irish Government, other factors that draw companies to places like Dublin, Cork, and Galway include low corporate tax, increasing number of ICT students, and availability of competent senior managers.

Hungary features among leading outsourcing hubs in Central and Eastern Europe. Its software and IT services market is dominated by application software and system infrastructure sub-segments, followed by other areas such as project services, ERP, and SAP. They cater mainly to the public sector, manufacturing, and banking verticals. Multinational firms dominate the technology industry, with a smaller share of Hungarian firms offering niche technologies.

The technology sector in Vietnam is supported by a positive industry growth rate and niche technologies such as cloud, big data, and analytics. While talent shortage persists, government measures like easing of foreign talent hiring and improving English language skills addresses these needs. Moreover, numerous free trade agreements, simplified taxation procedures, tax cuts, and incentives have contributed to a positive investor sentiment in the country.

Mexico is one of the largest outsourcing markets in Latin America and attracts almost a quarter of the software projects in the region. The sector, however, has its fair share of challenges in terms of limited technical and managerial talent, and average English proficiency. Despite the launch of several programs such as Mexico First and PROSOFT to improve the industry’s competitiveness, high corruption levels and bureaucracy impact ease of doing business.

Brazil’s Macro-Economic and Geo-Political climates continue to be highly volatile. While the economy shows no signs of recovery, massive corruption levels and political scandals leading to the impeachment procedures against President Dilma Rousseff as well as the ongoing outbreak of Zika virus only worsen the outlook. Nevertheless, the outsourcing sector appears to be quite resilient and continues to receive heavy investments.

Colombia’s internal struggles with left-wing groups continue, the most prominent ones being the Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN). Recent outbreaks of the Zika virus and the ongoing energy crisis have also added to the government’s woes. While these individual factors have not daunted the Colombian outsourcing industry from growing, their combined effect could be a deterrent in future, if left unresolved.

Poland has emerged as one of the most important outsourcing markets in Central and Eastern Europe owing to its strategic access to West European markets, and robust commercial and telecom infrastructure. Within Poland, Tier I outsourcing markets include Krakow, Warsaw and Wroclaw. The country faces scalability issues due to its small industry size and a limited technically-skilled workforce.