Vietnam has capitalised on increasing labour costs in China to take first place in the ranking while India remains the world’s largest business process outsourcing market.
Vietnam established its presence in the sector thanks to numerous government reform policies to promote the country as a key outsourcing destination. C&W predicts the service segment will expand rapidly given the average age of the country’s workforce is under 30 and 1-1.5 million people enter the labour market every year.
The software industry has increased rapidly in recent years with over 1,000 operating companies recruiting 80,000 labourers. Vietnam has become one of the world’s biggest software exporters and the second biggest outsourcing country for Japan.
C&W Vietnam’s Director of Valuation and Research Department Jonathan Tizzard said the ranking reflects the Government’s ability to create a stable business environment and introduce policies to improve education quality and professional skills for the younger generation.
Additionally, foreign direct investment to Vietnam is expected to increase with the signing of the Trans-Pacific-Partnership Agreement, possibly this year or in 2016, and once the two revised Laws on Housing and Real Estate officially take effect in July 2015, making room for foreign investors to operate in the country, he added.
C&W’s Head of occupier services for the Asia-Pacific and the Middle East and Africa Richard Middleton said that while Vietnam is not the cheapest outsourcing destination, it is still very competitive globally.
Wage increases in India and China have pushed Vietnam to top the rankings in 2015, he added.