China witnessed increasing criticism about its unfriendly business atmosphere, particularly towards foreign firms, due to continual cyber-security and data protection regulations and complex business procedures. Nevertheless, sourcing industry continues to get the government’s support as China is seen to be taking a number of initiatives to improve the technological environment in the country. As always, risk from natural disasters continues to threaten the business operations that do not have appropriate business continuity plans.

India’s IT-BPO industry boasts high provider and process maturity, aided by a large talent pool and strong government support. However, rising labor costs, social unrest and increasing vulnerability to cybercrimes are key challenges. India has registered a salary increase of 10.3% in 2016, compared to the slightly higher 10.7% witnessed in 2015. However, the average wage hike in India is significantly higher in comparison to the Asian regional average of 6.4%.

Factors such as heightened crime levels (especially towards foreign residents), increasing terror threats, vulnerability to natural disasters and soaring rates of cybercrime continue to be persistent in the country. However, arrival of the new government has created a positive environment in Q2 2016. Business confidence has surged, owing to expectations of announcements of investor friendly economic as well as business policies, tax reforms and social security policies in the coming months.

Hungary is one of the key sourcing markets in the Central and Eastern Europe (CEE) region. Primary industries serviced in the country include BFSI, public sector and manufacturing. While multinational firms dominate the technology industry, a smaller share of Hungarian firms offers niche technology services. Application software and system infrastructure, project services and ERP are among the main offerings in Hungary’s sourcing market. To overcome lack of innovation, the country has doubled the financial aid for R&D-focused activity in the country for the period 2016-2020.

Ireland’s sourcing appeal is buoyed by factors such as a competent business atmosphere, low corporate taxes, good English-speaking workforce, and strong client portfolio. The country’s software sector in particular, witnessed a large increase in foreign investments as well as in talent pool during 2015. However, due to the current political situation, concerns are prevalent about the potential impact of the Brexit on Ireland’s economy and business policies.

Mexico’s ITO/BPO sector has seen tremendous growth in the last decade and boasts the presence of major players like IBM, Accenture and TCS. To overcome challenges of limited human capital, various initiatives such as Mexico First and PROSOFT have been started. In June 5th 2016, 12 Mexican States held elections for governor, while the ruling Institutional Revolutionary Party (PRI) losing its governorship positions in six states. The election confirmed growing unpopularity of the current government.

Being one of the promising sourcing locations in the Asia Pacific, Vietnam’s software market is witnessing increased revenues, particularly through exports. A rise in the number and scale of firms providing sourcing services for foreign partners is also noticed. The growth is supported by a vast array of incentives by the government. However, shortage of skilled talent is a persistent issue; with an estimated skill gap of around 200,000 IT workers foreseen in 2016-2020.

Colombia’s sourcing industry boasts the presence of major players such as HP, Dell and Accenture and offers services ranging from contact center to application development & maintenance, finance & accounting, etc. As the industry is scaling up, issues in terms of limited talent pool, shortfall of bi-lingual and multi-lingual workforce and poor English-proficiency are cropping up. To address these concerns, the administration has rolled out several initiatives such as the National English Program of 2015-2025, the Productive Transformation Program, National Learning Service (SENA) and Vive Digital.

Brazil continues to be one of the preferred offshoring countries in the Americas. Software segment witnessed noteworthy growth in 2015, followed by IT services and hardware. Furthermore, during the quarter, Brazil’s business, political and economic climates witnessed slight uptick after Michel Temer assumed the position of acting President in May 2016, providing an optimistic outlook for the coming months.

Poland has cemented its position as one of the most important sourcing markets in Central and Eastern Europe favored by its strategic access to Western Europe and emergence of BSS (Business Services Sector) that now includes Knowledge Process Centers and Centers of Excellence for financial analysis, application development etc. A robust commercial and telecom infrastructure further aids these developments. Within Poland, Tier I sourcing markets include Krakow, Warsaw and Wroclaw. Nevertheless, scalability issues due to its small industry size and a limited technically-skilled workforce is prevalent.