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Offshoring: 25 most dangerous cities for outsourcing in 2010

Stephanie Overby | June 11, 2010
Singapore among the top ten safest outsourcing destinations

Infrastructure stability in those two cities has also improved, with customers reporting fewer outages, Wilson adds.

Prague, Czech Republic, Warsaw, Poland, and Brno, Czech Republic ranked as the top three safest cities for outsourcing in 2010, while Singapore fell from the top spot to number seven. Both the Czech Republic and Poland boast skilled IT workforces, centers of excellence set up by major multinational corporations such as Accenture and Cap Gemini, and an influx of Indian vendors selling IT outsourcing and business process services to western Europe.

Manila in the Philippines and Kuala Lumpur in Malaysia both skated off the most dangerous list for the first time thanks to the success of some key vendors, which put a shine on each city's standing, says Brown.

Brazil's metropolises also made strides year-over-year with Rio de Janeiro and Brasilia (both named dangerous in the 2009 list) finally joining Sao Paolo as safe outsourcing spots. Brown credits Rio's and Brasilia's improved rankings largely to the "halo effect" of Rio's winning bid to host the 2012 Summer Olympics. Efforts to reduce crime and corruption, increases in rural workforce training, and a maturing legal system also buffed Brazil's image, he says.

Johannesburg, while still perceived as dicey, has fallen from third most dangerous city last year to 24th in 2010 as South Africa hosts the World Cup.

At the opposite end of the spectrum, cities that plummeted the most in the annual location risk survey and are now perceived as more risky included Montevideo, Uruguay, Mexico City, Budapest, Hungary, and San Jose, Costa Rica. "Mexico City was hurt by the crime and violence of the border cities," says Wilson. "The further from the US/Mexico border, the better the perception of Mexican outsourcing locations."

Meanwhile, Montevideo, Budapest and San Jose simply haven't produced enough cost savings, skilled workers--or flashy ad campaigns--to increase their attractiveness to outsourcing buyers, says Wilson. He notes that no real changes occurred in each city's actual risk year-over-year, which leads to an important point: The Datamonitor survey respondents' take on particular outsourcing hubs aren't always accurate. Brown and Wilson fact-checked several categories against actual data from such sources as the United Nations and the CIA Fact Book and uncovered several discrepancies.

For example, while those polled said Lagos, Nigeria, Lahore, Pakistan, and Medellin, Colombia were the least safe in terms of violent crime and police protection, in reality Costa Rica, India and Sri Lanka had the fewest police per capita, and the Dominican Republic, Colombia and Brazil had the highest violent crime rate, according to March 2010 statistics from the CIA World Factbook.

Also, Lagos, Lahore and Medellin were thought to have the least secure IT infrastructure, when in fact Bangladesh, Belarus and Ghana have the dubious distinction of the fewest secure internet servers per capita, also according to March figures from the CIA. Lagos, Lahore and Medellin also ranked high in poll taker's minds when it came to terrorist threats, when Israel, Colombia and Thailand may in fact be more vulnerable, again according to March CIA data.


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