As per the results announced yesterday by the AT Kearney, based on thier annual survey. The wage cost advantage of offshore locations for office services is set to last for another 20 years, says the latest annual survey by global management consulting firm A.T. Kearney. Even though wages in offshore locations for services, such as IT, business processes and call centers, have started to rise, they will remain cheaper for the foreseeable future under the most aggressive projections of wage inflation and currency appreciation in developing countries.

"What is most striking about the results of this year's Global Services Location Index is how the relative cost advantage of the leading offshore destinations declined almost universally, while their scores for people skills and business environment rose significantly," said Paul Laudicina, managing officer and chairman of A.T. Kearney. "These findings reinforce the message that corporations making global location decisions should focus less on short-term cost considerations, and more on long-term projections of talent supply and operating conditions."

Highlights from this year's Index include:

-- India and China continue to lead the Index by a wide margin, with declines in cost advantage offset by further improvements in talent supply and business environment.

-- South East Asian countries reinforce their position as the primary alternates to India and China, with all six major ASEAN markets (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) now ranked among the top 20 locations.

-- Reflecting new policy initiatives to promote service exports in many countries, Latin America performs well, with all five major contenders (Argentina, Brazil, Chile, Mexico and Uruguay) rising in the rankings.

-- As projected in previous years, newer contenders in Central and Eastern Europe are increasingly outshining more established players, as Bulgaria, Slovakia and the Baltic States move ahead, while the Czech Republic, Hungary and Poland slip in the rankings.

-- The Middle East and Africa continue to rise in visibility, with Egypt, Jordan, the United Arab Emirates, Tunisia, Ghana, South Africa, Israel and Turkey all maintaining or improving their position, while Mauritius, Morocco and Senegal debut in the rankings

-- While most "on-shore" or "near-shore" locations in developed countries improved their absolute scores, almost all fell in the rankings, as emerging markets improved their people skills and environment scores at a faster rate.

"While total compensation costs for sample positions like IT programmers or call center representatives rose by 5-10% in most developed countries, average wages for similar positions in India, China, the Philippines and parts of Eastern Europe and Latin America grew anywhere from 20% to 40%," said Martin Walker, senior director the Global Business Policy Council, the A.T. Kearney sponsor of the research.

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Prashanth Rai