Mumbai Named Second Most Dangerous Outsourcing Location

Mumbai ranked second to Jerusalem on a list of the most dangerous places for outsourcing—even before the recent terrorist attacks plunged the city into chaos.

In fact, India had two regions ranked among the top five most dangerous places for outsourcing, according to a survey of 448 corporate development and outsourcing destination specialists conducted by Black Book Research and Brown-Wilson Group. The survey ranked 50 of the largest established and emerging offshore locations—from the safest to most dangerous—based on threat of terrorism, crime, climate hazards, and other factors (locations in the U.S. and the U.K. were excluded).

The results were not overly surprising. Jerusalem, Mumbai, Rio de Janeiro/Sao Paulo (Brazil), Manila/Cebu/Makati (Philippines) and Delhi/Noida/Gurgaon (India) were ranked as the most dangerous places for outsourcing in the report.

The safest outsourcing locales? Singapore, followed by Dublin (Ireland), Santiago (Chile), Krakow/Warsaw (Poland) and Toronto (Canada).

The terror attacks in Mumbai, along with the prospect that President-elect Barack Obama could follow through with policies that could penalize outsourcers with tax disincentives, have many U.S. corporate executives rethinking their offshore outsourcing strategies.

That could spell trouble for several outsourcing locations, particularly India. U.S. companies alone are expected to spend around $25 billion this year on IT outsourcing contracts with vendors on the subcontinent.

Study authors Doug Brown and Scott Wilson noted that the risks involved with many offshore locations may begin influencing corporate decisions to outsource to vendors at home or in locations that are closer to home.

“Outsourcing buyers are now keenly aware they can no longer justify offshore cost savings where their business continuity is in jeopardy,” they noted.

The Most Dangerous 10
1. Jerusalem (Israel)
2. Mumbai (India)
3. Rio de Janeiro/Sao Paulo (Brazil)
4. Manila/Cebu/Makati (Philippines)
5. Delhi/ Noida/Gurgaon (India)
6. Kingston (Jamaica)
7. Kuala Lumpur (Malaysia)
8. Johannesburg (South Africa)
9. Bangkok (Thailand)
10. Bogota (Colombia)

The Safest 10
1. Singapore
2. Dublin (Ireland)
3. Santiago (Chile)
4. Krakow/Warsaw (Poland)
5. Toronto (Canada)
6. Prague/Brno (Czech Republic)
7. Budapest (Hungary)
8. Monterrey (Mexico)
9. Beijing (China)
10. Cairo (Egypt)

Filed by Matthew Scott of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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