As a key global sourcing market, China’s IT-BPM growth has been fueled by its strengths in human capital, technology capability, and cost arbitrage. However, the country has also faced criticism for its unfriendly business atmosphere, particularly towards foreign firms. Nevertheless, the sourcing industry continues to get government support as seen from a number of initiatives for improving the technological environment. High pollution levels, natural disaster risk, and cybercrime are among the key challenges.

India remains the go-to market for IT-BPM services with high provider/process maturity and a large talent pool. However, rising salaries, social unrest, and cybercrime have emerged as key challenges over the years. To improve the country’s business competitiveness and create a positive investor climate, the current administration has implemented several reforms for eradicating excessive bureaucracy while improving transparency and efficiency.

Hungary is one of the main hubs for shared services in Central and Eastern Europe, with several IT companies relocating their R&D centers there owing to cost effectiveness and talent availability. Primary industries serviced include BFSI, Public Sector, and Manufacturing. While multinationals dominate the technology industry, a smaller share of Hungarian firms offer niche tech services. The IT industry continues to attract investments with Hungarian Government’s continual efforts to improve the business environment.

A positive business atmosphere, technological capability, favorable tax regime, and good English-speaking workforce are among Ireland’s strengths that attract IT-BPM businesses. The country’s software sector in particular, witnessed a large increase in foreign investments as well as talent pool during 2015. However, repercussions of the Brexit are expected to weigh in on the Irish economy in the mid to long-term.

In recent years, Mexico’s IT-BPM sector has increasingly gained relevance among firms looking to leverage the nearshore advantage, boasting the presence of many major players like IBM, Accenture, and TCS. As a key nearshore hub in LatAm, Mexico has distinct advantages of cultural compatibility with major buy-side markets like the U.S, a multilingual labor pool, and cost arbitrage. However, widespread corruption, regulatory challenges, and high crime are key concerns for enterprises operating in the country.

Favored by growing exports and a rapidly expanding ICT sector, Vietnam’s software industry has recorded increased revenues in recent years. Furthermore, its nearshore position with respect to sourcing services to Japan and South Korea offers a positive outlook for its IT Services market. The Vietnamese Government is providing a vast array of incentives and taking various measures to improve the business environment. However, shortage of skilled talent is a persistent issue.

The Philippines, already a highly attractive market for BPM services, recently unveiled it 2017-2022 Roadmap which aims at increasing market share of non-voice components and high-value activities such as Analytics, Artificial Intelligence etc. Key challenges for investors include the current political turmoil, infrastructural issues in CBDs, and heightened crime levels (especially towards foreigners). To alleviate some of the pressure on existing infrastructure in the NCR, the government is promoting decentralized growth in “Next-wave Cities”.

Despite Macro-Economic and Geo-Political challenges, Colombia’s appeal as a nearshore sourcing destination remains strong. Apart from being a strategic location, presence of a large Spanish-speaking workforce and overall cost arbitrage play a key role in attracting enterprises to the country. The services portfolio over the years has expanded to cover Application Development & Maintenance, Finance & Accounting, etc. Key scalability challenges for firms include limited multilingual capability and availability of STEM graduates.

As a favored destination for hosting IT-BPM operations that can serve clients globally, Brazil’s strategic advantage in the Americas has been key to the sourcing sector’s growth in the country. Its weak currency has further increased the cost advantage associated with sourced operations. With a possibility of improvements in the country’s economic climate owing to fiscal interventions, Brazil stands to gain from the growing nearshore trend.

Poland’s sourcing sector continues to gain market share owing to the country’s strategic access to Western Europe, a talented workforce, and low operational costs. Krakow and Warsaw have the maximum number of sourcing companies in Poland owing to their robust commercial and telecom infrastructure. However, large scale expansions can be a challenge due to Poland’s small industry size and a limited workforce with niche IT-SMAC skills.