Latin America grows in outsourcing popularity

Lower costs and proximity to North America cited as reasons

March 18, 2011
by Purchasingb2b Staff


Latin America is a popular outsourcing destination for US companies and the region will become increasingly important, according to a survey by consulting firm Capgemini.

The Capgemini Executive Outsourcing Survey, conducted online last April 6 to 16, measured North American business leaders’ top reasons for selecting Latin America as part of their outsourcing strategy. The survey polled over 300 senior executives from Fortune 1000 companies in the US.

The survey asked if companies would consider Latin America as a resource for outsourcing in the future and whether Latin America was an emerging market. The survey also asked what factors companies considered when choosing outsourcing locations.

According to the survey, 25 percent of respondents outsource to Latin America. However, India (60 percent) and China (27 percent) beat out Latin America as the most popular outsourcing destinations.

The top reasons for Latin America’s growing popularity included cost of labour, skills, technology and infrastructure capabilities and economic stability. Other reasons include proximity to the US and time-zone alignment.

Among respondents, 56 percent said doing business in Latin America had become easier, and 83 percent said there were advantages to doing business there.

An overwhelming majority—89 percent—said Latin America is an emerging market that will become increasingly important to US business.