Eight Asia Pacific countries, including Malaysia, was placed in the top 15 nations which were recognised as the most attractive destinations for offshore services globally.
Global management consultancy Kearney has published its 2023 Global Services Location Index (GSLI) that studies the critical factors that make countries attractive as potential locations for offshore services. This potential offshore destinations for global companies were cited by Kearney’s Global Services Location Index 2023 which focuses on talent regeneration and digital skills.
In an era of rapidly evolving global business landscapes, business services like information technology, business process outsourcing (BPO), and engineering are increasingly being delivered across borders as companies seek to reduce costs, scale talent, and increase efficiency by utilizing the global talent base. In the current climate, Asia Pacific (APAC) markets shine as potential offshore service destinations, with India, China and Malaysia continuing to lead the index as the top three destinations respectively.
The Index revealed that Malaysia (GSLI rank 3) benefits from a strong focus on building digital skills, the adoption of emerging technologies, and government support for developing digital skills.
The nation has a workforce equipped with advanced digital skills such as cloud architecture, analytics, AI, and software development contributes an estimated US$105.7 billion (RM484.05 Billion) a year to the country’s GDP.
Already a hub for top companies, Malaysia’s digital economy has initiatives to help tech start-ups integrate across the region, and the country is making investments to attract Fortune 500 tech companies to create high-value jobs.
The country is also banking on public–private partnerships to narrow the skills gap and achieve the goals of its transformative Malaysia 5.0 initiative while also fulfilling initiatives such as the #MyDigitalMaker Movement, eUsahawan, Premier Digital Tech Institute, and Digital Skills Training Directory to upskill and reskill its population.
Continuing their strong showing in GSLI 2021, APAC countries lead this year’s Index, with India, China and Malaysia in the top three largely due to cost advantage, talent availability, and strong skills. Meanwhile, Indonesia, Vietnam, Thailand, the Philippines, and Singapore are ranked among the top 15. Singapore jumps 24 ranks from 38th to 14th in this year’s rank, the highest leap by any country.
“Geopolitical, economic, and technological forces have spurred significant changes in the global labour market. Therefore, a country’s ability to reskill and redeploy its workforce in response to changing market demands and technological disruptions is key to improving its attractiveness as an offshore location for business services,” says Arjun Sethi, Kearney’s Global Vice Chair of Digital Transformation, Regional Head and Chairman of Kearney’s APAC Region, and co-author of the 2023 GSLI report.
“Talent regeneration will be the most crucial gamechanger as Industry 4.0 continues to reshape the demand for future skills and jobs. And this is what has kept the top three countries – India, China and Malaysia – solid in the Index for a few years now, while the rest have been fairly fluid in their positions.”
Adding on he said, “So in a nutshell, while building regenerative talent pools, everything, everywhere, all at once, is what a country should seek to achieve – to consistently stay ahead of the curve.”
2023 Kearney Global Service Locations Index
The GSLI ranks 78 countries based on 52 metrics that cover four dimensions including financial attractiveness, people skill and availability, business environment, and digital resonance. A key trend emphasised in this year’s report is the importance of talent regeneration – a country’s ability to rapidly reskill and redeploy its workforce in response to changing market demands and technological disruptions to maintain and enhance its attractiveness as an offshore location.
The 78 countries in the 2023 Global Services Location Index were selected based on corporate input, current remote services activity, and government initiatives to promote the sector. They were evaluated against 52 metrics across four major categories: financial attractiveness, people skills and availability, business environment, and digital resonance.
This year, Kearney refocused the Index to be more forward-looking and captured digital resonance and talent regenerative capabilities and availability. In the process, a few metrics were dropped from the people skills availability and digital resonance pillars that were focusing on traditional IT, and new digitally focused parameters were added.
This along with global trends and key local disruptors led to marked differences in some countries’ rankings.
