Outsourcing sector to hit $479b

The worldwide outsourcing industry is seen to hit $479.3 billion by 2016, as there has been a major shift in the industry in the past five years, according to a report from the Dubai Outsource Zone, or DOZ.

The special study, entitled “Outsourcing Opportunities in the MENA Region” and done in collaboration with global business research and consulting firm Frost & Sullivan, was issued on the occasion of DOZ’s fourth anniversary.

The research pointed out that the UAE and the wider MENA region are considered attractive destinations due to their better quality of life, high levels of international compliance and availability of foreign language professionals.

The report further showed that global outsourcing markets $370 billion, will register a compound annual growth rate, or CAGR, of 8.35 per cent, while the MENA region is expected to post a CAGR of eight per cent during the forecast period of 2009-2016. The UAE outsourcing market is expected to record a CAGR of 10 per cent during the same period.

The industry’s growth trend is also attributed to a change in business practices, largely due to the financial crisis that has encouraged organisations to outsource.

In the MENA region, the UAE is the second-largest outsourcing market after Egypt, with Dubai particularly emerging as a preferred destination due to its prime location offering easy access to the entire Middle East, Africa and Asia.

“As DOZ celebrates its fourth anniversary, the growth witnessed by the cluster in such a short time signifies the role it has played in developing the emirate’s outsource industry,” Malek Al Malek, Managing Director of DOZ and Dubai Internet City, said.

“DOZ offers a blend of benefits including state-of-the-art infrastructure, hi-tech and latest telecommunication experience. It also offers a better lifestyle, reducing workforce attrition and a multicultural personnel base. DOZ sees the bigger markets such as India and China as an option to complement an organisation’s BPO in markets around the world,” he added. DOZ provides a comprehensive purpose-built infrastructure to both captive and non-captive companies looking to set up in the region, control costs and gain efficiencies by leveraging the talents, technology and expertise in the UAE.

“The entire outsourcing industry was based on low cost activities. But now clients are ready to pay a premium if they are assured of high quality services. Due to this trend, governments of well-established outsourcing destinations are in the process of re-aligning their outsourcing industry and its development strategies,” Frost & Sullivan Consultant for Middle East and North Africa Information and Communication Technologies Lindsay McDonald said.

The UAE has shown a similar development cycle that is experienced globally in the past by venturing into specialised services such as customer care and management services. This is a primary reason for DOZ’s success in attracting companies with a business focus on the Middle East, India, Africa, as well as Central and Eastern European nations such as Poland, Russia, Hungary, Czech Republic and Croatia.