TPI's latest report shows a whopping 70 percent drop in value in outsourcing contracts signed by U.S. companies in 2007's first quarter.
While TPI's managing director attributes the decline to a softening of the global outsourcing market, more than anything it appears to be an effect of a highly mature U.S. market. During the same period, outsourcing activity showed healthy growth elsewhere -- a 75 percent increase in Europe and 30 percent in Asia-Pacific.
Because the U.S. has traditionally accounted for such a big chunk of the global outsourcing market, TPI is predicting a growth rate of just 4 percent in terms of total contracts signed in 2007. That will likely rise, however, with continued growth in non-U.S. markets.
It's certainly no coincidence that Indian outsourcing providers have been beefing up their presence in varied geographies like Eastern Europe, China and Japan. Many companies prefer to keep outsourcing initiatives closer to home -- wherever home is. Thus, Western European companies are more likely to feel comfortable sending work to Bulgaria than Bangalore, while Asian companies feel more cultural affinity with China or Malaysia.