Offshore Opportunity

“Singapore is recognized by international agencies such as World Economic Forum, Political and Economic Risk Consultancy and Business Environment Risk Intelligence as one of the most conducive places in the world to do business. To date, over 7,000 multinational corporations (MNCs) have established a presence in the country, of which 60% have chosen to make Singapore their regional headquarters. Many have also chosen to site their global or regional IT hubs in Singapore.

With a pro-business environment, world-class infrastructure, stable political climate and a reputation for efficiency that is second to none, Singapore stands out as an ideal location for businesses looking to locate their operations.  Singapore is well positioned to be the trusted hub for strategic IT-enabled activities such as global and regional CIO functions, innovation centers and technology development centers.

As Singapore's infocomm authority, IDA aims to develop Singapore as a hub for high-end IT services, building on Singapore's strengths, for example, its next generation infocomm infrastructure and trusted hub status, and leveraging on opportunities in the key economic sectors. IDA supports the development of the local infocomm industry through the creation of a vibrant infocomm ecosystem that promotes entrepreneurship, innovation and collaboration. MNCs are welcomed (both infocomm and non-infocomm) to come and set up strategic high-end IT functions in Singapore”.

The Singapore Economic Development Board is currently offering tax breaks and other incentives for the IT firms setting up their business in Singapore.  The board emphasizes that the country’s advanced communication infrastructure and also the travel infrastructure along with the geographical location of Singapore in south-east Asia is a perfect ground to recruit highly qualified workforce.

According to a study by accounting firm KPMG published earlier, states that Singapore is the most cost-competitive business location among nine industrialized countries, including the UK, America and Japan.  The study indicates that Singapore was 22 percent cheaper than the benchmark US.  KPMG examined 27 cost components, including wages, freight costs, business taxes, rent and utilities pricing.

Singapore is consolidating its place in the outsourcing world.  The country’s effort to consolidate its position in the outsourcing worlds got a boost when the Swiss bank announced that it is moving some of its back room operations to Singapore by moving 900 staff.  The government policies regarding the IT industry started to prove right when Singapore became a regional hub for Business Process Outsourcing.

According to the Infocomm Development Authority of Singapore (IDA) IT players like Hewlett-Packard, IBM and Microsoft has moved their Business Process Outsourcing operations to Singapore to improve their efficiency.

According to Gartner Dataquest, the global BPO market is estimated to reach US$173bn by 2008. IDA expects Singapore’s BPO market worth S$440m in 2005 and would be S$817m by 2009.IDA has also set aside S$12m to help local Infocomm companies to tap into the growing outsourcing business.

“Singapore is now the world's top location for outsourcing,” a study by the Economist Intelligence Unit said.The Republic's 22.6 offshoring projects per million people beat 59 other countries, the study showed. EIU looked at data gathered by the United Nations Conference on Trade and Development (UNCTAD).CEOs polled by EIU also ranked Singapore as the world's fourth-most attractive outsourcing location, Business Times reported Monday.The study, which was co-sponsored by American software giant Oracle Corp, and Dimension Data, ranks 60 of the world's key economies on their attractiveness as offshoring locations in nine categories, including political and security risk, regulatory environment, tax regime, labor laws, costs and skills, and infrastructure. In overall ranking, Singapore came in fourth behind India, China, and the Czech Republic.

In absolute terms, Singapore's total of 95 offshoring projects puts it in sixth place globally, said EIU. These projects include call centers, shared service facilities, InfoTech services, and regional headquarters related functions.The UNCTAD trade investment report states that India is currently home to 228 offshoring projects, followed by Britain's 187, China's 132, America's 123, Canada's 98, and Singapore's 95. Behind Singapore are Germany and Ireland with 77 each, Australia with 72, and the Netherlands with 52”.