The following is the concluding section of the T&T IFC whitepaper “7 Critical Factors to Consider Before Selecting a Location in the Booming Nearshore Market.” In addition, you can read the introduction and other sections detailing all the different categories analyzed here:
- Introduction: 7 Critical Factors
- Part 2: Business and Political Climate
- Part 3: Talent Pool
- Part 4: Service Specialization
- Part 5: English Proficiency
- Part 6: Natural Disaster Risk
- Part 7: Connectivity and Infrastructure
- Part 8: Governmental Agencies and Support
Putting It All Together
There is good news for the Latin American and Caribbean countries fighting for nearshore business: there is now more to go around than ever before.
Frost & Sullivan’s research shows that the nearshore is growing at a high single-digit rate annually and is likely to maintain this pace for the next five years. “There’s a growing pie to share among all the countries,” saysSebastian Menutti, an industry analyst at the San Antonio-based consulting and research firm Frost & Sullivan. “Not everyone is competing for the same service here.”
He says that the trend is clear. The nearshore benefits are becoming more apparent to everybody, and many locations have figured out how to deliver. “U.S. companies now can see actually that we do have a proven track record of providing services,” says Menutti.
This sentiment is shared by Salil Dani, vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group. Embracing the nearshore is no longer just a novel idea. He says the service providers in Latin America and the Caribbean are increasingly being viewed as an essential part of the strategies maintained by the Fortune 500 companies that have been in the outsourcing game for decades, such as General Electric, Citigroup, Proctor & Gamble, and Bank of America.
“They are growing a lot in Latin America in particular,” says Dani. “Within Latin America, there could be questions as to whether you want to go to somewhere like Mexico or Costa Rica depending upon what you want to do or other factors. But nearshoring as a proportion is growing in terms of headcount and in terms of revenue. The time-zone alignment creates a huge plus.”
Gott believes that many countries are now very capable of providing quality services. It just depends upon the need. Those companies that have the patience can build something dynamic in not just the known hotspots but across the entire region. “If you start small and grow organically from there, you can start operating in a lot of different countries,” says Johan Gott, an analyst at Chicago-based global consultancy AT Kearney.
Yes, there are various — and critical — considerations to weigh before deciding exactly where to go. But one thing is for sure: companies are now eagerly coming to Latin America and the Caribbean. “Latin America has a lot to offer and can serve quite a variety of different needs from different price points,” says Menutti.