Much has been said about Indian labor, in recent years there has been a rise in the amount of work outsourced to India. As a consequence India has become the leader in the outsourced services market, being responsible for half of the world’s outsourced labor market, this trend that began in the 80’s fueled by an abundance of English speaking labor and low-cost now generates approximately $47 billion2. India now provides services for American and European industries that range from financial services to retail, totaling more than 2 million people. Nonetheless as good as outsourcing parts of IT to the Indian subcontinent as it is; success hasn’t come without cost. India’s job market is booming and so are its wages, in 2010 alone wages in India increased approximately 10% the highest in all the region with technical wages in India standing at 5000 to 12000 USD a year1.
On the other side of the world things look brighter, Colombia aligns itself with the world in a bold strategy to commercialize not just its traditional products but its labor also, in the past decade there has been a growing trend of outsourcing many call-center operations towards Colombia; the market for outsourced labor in services reached $565 million in 2009 and exports stand at $95 million an almost insignificant footprint compared to India the number one player in said market. On the IT side of things, with a good base of English speaking labor, a solid work ethic and one of the largest technical and college educated workforce in the region, Colombia has attracted big players of the likes of HP and Microsoft which have chosen Colombia as a Pie de Terre for its South-American operations.
The main concern at the time of set up of an offshoring operation has to be human assets, in this regard Colombia has many advantages, and studies by the IDB (Inter-American Development Bank) have shown that Colombia has a very compelling offer in the IT, BPO (Business Process Off shoring) and KPO (Knowledge Process Off shoring) markets, as noted by Fabrizio Opertti, head of the Program for Integration and Commerce for the IDB3.
Colombia is well aware and prepared for this new chapter of its integration into the global economy, and the export of services is one of the key elements of this new facet, in the last 3 years the off shoring industry in Colombia grew 91%, the reflection of a market that has been showing an accelerated growth in the last decade and the country is positioning itself to take advantage of this trend, Colombia has many competitive advantages that make it attractive from its high standards of quality to its tax code which exempts services outsourcing activities.
In a sense this is the moment for Colombia to emerge as an IT superpower in the region, with really competitive wages (in some cases underselling India) in addition to an abundant source of labor at any skill level, enviable position in the center of the Americas and a solid telecommunications infrastructure, Colombia is one of the best alternatives for high technology and mass production ventures, from computer code production to web developing and internet applications, the opportunity is there to be seized, also being a short distance from most of the continental U.S it offers an excellent option for investors looking to play its cards close to the vest.
The Colombian software marker for instance is pretty mature, there are over 700, software and IT related companies which together registered sales of $280 million during 2011; The market has a sustained 8% growth per year, above the average global technologic expenditure growth of 6.8%; Software industry group Fedesoft, projects that in the next 25 years the industry could be worth $4 billion within the next decade4.
In short, it’s time for a change, it’s time to play it local, hop off the elephant and start looking for a nice burro.
Please inquire for more information regarding outsourcing in Colombia!