India currently monopolizes software development offshoring due to its sheer amount of IT professionals. This year, however, has been particularly volatile for Indian firms and India’s reputation as a well-educated coder mecca. In 2017, Aspiring Minds, a research and assessment firm, surveyed 36,000 engineering students from 500 Indian universities and found that less than 5% of students can perform high-skilled programming. This isn’t the first time India’s “quality vs quantity” criticism has arisen. Back in 2011, a different study conducted by an Indian firm found only 25% of IT engineering graduates to be employable.
US and western companies find India attractive despite its shaky education system because of the perceived cost savings benefits. On average, companies save roughly 30% to 60% on labor costs when outsourcing/offshoring to India. However, consumer behavior is rapidly changing and skimping on quality can end up costing new and old companies alike.
Here are the top unlikely offshoring countries to watch in 2018
Argentina has positioned itself as a South America regional IT leader. The country is tech-savvy and proficient in English. The Argentine education system focuses on a proficiency in software development and understanding. In 2013, Argentina had over 80,000 qualified software programmers. Even though Argentina is referred to as a developing nation, its infrastructure far surpasses other countries in the region. Thanks to help from multinational private firms in partnership with the government, Argentina’s deregulated telecom network is fast and durable.
Argentina is a great nearshoring prospect. Being just one hour ahead of Washington, D.C., communication will be a breeze. You can tackle unforeseen challenges when they occur instead of waiting for the next business day.
Perhaps one of the most unlikely offshoring countries, Kenya’s IT atmosphere is rapidly expanding. The 2015 Global Entrepreneurship Summit in Kenya where President Obama, Steve Case, and Airbnb CEO Brian Chesky were in attendance, bolstered Kenya’s position as an IT hub. Nairobi is affectionately known as “Silicon Savannah” thanks to a wave of investment in tech startups and other businesses. Kenya has two official languages: Swahili and English. The entire continent of Africa is undergoing large-scale changes driven by the governments of various countries. Kenya’s telecom infrastructure operates on 4G and is more secure in comparison to other African countries.
If you are looking for a cost-effective and highly-skilled solution, Kenya is the country for you. Kenyan programmers are proficient in Java development, SQL databases and software development for mobile solutions. Most importantly, many of Kenya’s programmers are US-educated or have worked in the US at IT firms.
In 2010, Clutch.co marked Thailand as a prospering IT hub. However, the country still lagged behind Romania, Mexico and other high performing countries at the time due to its lack of scientific literacy. Now almost a decade later, Thailand is herald as an ICT leader in ASEAN. Similar to the previous listed countries, the Thai government is investing in expansion of IT. Recently, the country rolled out its 4G network, as well as, created a robust network of fixed-line assets. The Thailand Board of Investment published a report in 2015 stating there is roughly 100,000 software and computer professionals working in the country. One main advantage Thailand has over other countries is its large youth population. A majority of the 100,000 in IT are under 30. While Thailand lacks proficiency in English, the education system is rapidly addressing this to ensure its competitive foothold. You can find workers skilled in mobile app development and management IT consulting. As an add bonus, the labor pool also has a strong understanding of SEO and digital marketing.
When considering Eastern European countries, Ukraine has set a high bar. Serbia, however, has recently caught the eye of many large companies such as Google, Intel, Oracle, and Adobe. Microsoft opened a center in Serbia in 2013. Many tech firms are either opening up shop or offshoring their software development to Serbia. You should, too.
Serbia is not a member of the EU, so their top talent remain in the country allowing them to be more competitive than elsewhere in Eastern Europe. With multi-lingual professionals, working with talent in this country could prove viable if you have business in the region. 33% of Serbian university graduates come from technical schools, specializing in the latest coding languages. Serbia is expected to see a surge in the IT market between now and 2020 as the government has created a 5 year plan to continue educating its population. Currently, universities produce about 1,500 software programmers a year. The Serbian government plans to increase that number to 5,000 per year. The plan will address modernizing Serbia’s IT infrastructure as a whole, as well.
You always want to be money smart, whether you’re a startup or enterprise; however, you don’t want to do this to the detriment of quality. Ubik Group has relationships with firms in these emerging markets, as well as, an office in Serbia. This list is ever-growing and we are watching the trends closely to help you make the most informed decision on where to offshoring your projects.