Global management consultancy Kearney today released the 12th edition of its Global Service Location Index (GSLI). It explores the key factors that make each country attractive as a potential location for offshore business services.
India, China and Malaysia continue to hold the top spot this year, while Brazil and the UK make the top five.
Asia-Pacific countries continue to hold the top spot thanks to their huge cost advantages, deep talent pools and strong skills, but the UK’s rise from eighth to fifth place is a notable milestone and the first time a Western economy has entered the top five.
In an era of rapidly evolving technology and ever-changing trends, business services such as IT, business process outsourcing, and engineering are increasingly being delivered across borders as companies look to reduce costs, expand talent, and leverage more of their global talent base to increase efficiency.
The global market for business services has also grown from USD 624 billion (£476 billion) in 2022 to USD 681 billion (£519 billion) in 2023 and is expected to grow at a CAGR of 8% to 2027, increasing the demand for such services.
To evaluate and compare offshoring candidate locations, this year’s GSLI ranked 78 countries based on 52 indicators across four dimensions: financial attractiveness, talent skills and availability, business environment, and digital resonance.
A key trend at GSLI this year is the importance of regenerating talent. As more tasks and processes are automated with the advent and adoption of digital technologies, cost-centric service locations are at risk of losing their competitive edge against more developed and technologically advanced countries. The regeneration of talent will therefore be at the heart of this change.
The UK tech sector has reached a $1 trillion (£800 billion) economy, trailing only the US and China, making it one of the strongest ecosystems in Europe. Earlier this year, the government announced it would invest £100m in funding for the Foundation Model Task Force, which is responsible for accelerating Britain’s capabilities in a rapidly emerging class of artificial intelligence.
The investment is part of Britain’s ambition to become a science and technology powerhouse by 2030, which already employs 3 million workers in the UK and gives a boost to the sector, which includes big companies.
The country has the highest number of technology patents filed in emerging technologies such as AI/ML, automation, blockchain, robotics and other digital technologies, making it a front-runner in the technology sector in the region.
In addition, Kearney said the UK government’s plans to invest in digital skills training and other programs, such as funding 1,000 PhDs in AI and scholarships, are helping to make apprentices and digital skills more responsive.
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Ramyani Basu, Digital Transformation Partner at Kearney, said: The UK’s move up the rankings is partly due to its heavy investment in digital training, newly announced government programs and funding companies that increase the chances of talent regeneration.
“Taking advantage of the potential of technological advances such as AI presents enormous opportunities to grow economies, create more jobs and continue to lead the region. It is critical that countries build strong talent pipelines and robust business environments that will not only meet the needs of today, but also those of future generations.
