Malaysia emerged among the top three locations worldwide for potential offshore services, ranking 3rd in the list according to Kearney’s 2023 Global Services Location Index (GSLI). Singapore ranked 14th this year compared to 38th in 2021, noting a significant advancement. Although APAC markets remained prominent within the top 10, the Philippines descended from the list, now securing the 12th position (compared to 9th in 2021).
The Index also emphasised the significance of talent regeneration in sustaining and enriching each location’s appeal for offshore businesses. It stated: “The speed at which a country reskills and redistributes its workforce in response to evolving market demands and technological disruptions is influenced by factors such as its education system, labour market conditions, immigration policies, government support, and digital infrastructure.
“Countries that can swiftly regenerate their talent pool possess a competitive edge over those that confront skills shortages and mismatches.”
Southeast Asian countries that showed strong capabilities in talent regeneration
Singapore (GSLI rank 14) jumped 24 spots, primarily because of its digital resonance and capabilities to foster innovation, which is reflected in the country’s thriving tech-based start-up ecosystem. Its tech economy will need another 1.2 million digitally skilled workers by 2025, and with demand growing, the need for a suitable workforce will also grow.
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. A workforce equipped with advanced digital skills such as cloud architecture, analytics, AI, and software development contributes an estimated $105.7 billion a year to the country’s GDP.
Indonesia (GSLI rank 6) has a massive workforce of about 135 million people, but there is a shortage of skilled workers. Only 40 percent of the workforce has the skills needed to work with emerging technologies, which led to it slipping two spots on this year’s GSLI.
Vietnam (GSLI rank 7) remains a strong Asian outsourcing destination. The presence of major technology companies demonstrates that the country is a global digital hub, motivating it to continue upskilling its workforce.
Thailand (GSLI rank 9) jumped one spot on the back of its financial attractiveness and business environment. Its future lies in capitalizing on its population’s digital skills to become an innovation hub.
The Philippines (GSLI rank 12) continues to be the business process outsourcing (BPO) engine of Asia: it is home to more than 1,000 BPO companies with nearly 1.2 million employees. However, it slipped three spots in this year’s GSLI, primarily because of the rise of Mexico and Colombia as nearshore capability centers with proximity to the United States.
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Report based on Kearney 2023 Global Services Location Index
