A US rating agency has ranked Bangladesh as the world's most cost-competitive destination for outsourcing.
In a latest global survey conducted by the agency, the country has beaten world's top outsourcing destinations like India, China, Malaysia and Brazil to secure the highest score in terms of financial attractiveness.
However, despite such outstanding score in terms of cost-competitiveness, Bangladesh secured 26th position in the overall survey output due to very low score in terms of skill and business environment.
The findings were revealed in the latest edition of the Global Services Location Index of American global management consulting firm A.T. Kearney.
The research paper analyzes and ranks top 55 countries for outsourcing worldwide based on scorecards in three areas, namely, financial attractiveness, people's skills and availability, and business environment.
Although, Bangladesh fares better than anyone in terms of financial attractiveness, it scored terribly when it comes to business environment.
In fact, only one country -- that is its South Asian neighbour Pakistan -- has a lower standing than Bangladesh in terms of business environment.
Bangladesh's score in 'People's Skill and Availability' is also quite low when compared to most of the countries that came up for the survey.
Nevertheless, Bangladesh has moved four notches up in this year's rankings and come ahead of many emerging developing economies, like Pakistan, Kenya and South Africa, in the overall survey.
The study has used several matrices, including average annual wages, average compensation costs for relevant wages, average cost of infrastructure, relative tax burden, costs of corruption and exchange of movements for measuring the financial attractiveness of an outsourcing destination.
Cumulative services, experience and skill, labour force availability, educational skills and language skills were the major dimensions for measuring people skills and availability in the survey.
Meanwhile, factors like country risk, cultural adaptability, country infrastructure and security of intellectual property were taken into account while measuring the business environment of a country.
Overall, India, China, and Malaysia have remained top three destinations for outsourcing according to the GSLI rankings while Asia continues to dominate. In fact, six of the top ten destinations ranked in the survey come from Asia.
"Offshoring to India remains a highly attractive proposition for many companies, and it is the undisputed industry leader," the study says.
"Consider, for example, that no fewer than five Chinese handset manufacturers have announced plans to establish R&D centres in India, which is expected to become the world's second-largest buyer of handsets," it added.
"China is closing in on India," the study said, "thanks to major gains in educational skills and cultural adaptability."
"Additionally, the renminbi's recent drop in value against the U.S. dollar should increase the country's financial attractiveness. Furthermore, China is making progress in improving governance and liberalising financial markets."
This year's Kearney report finds a new business model threatening established concepts of offshoring and expanding the market. That is, automation combined with business process as a service (BPaaS) has the potential to be an even more powerful force for disruptive change than automation alone.
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