The most important thing to business in the developing countries is to source for buyers amid this global inflation and financial breakdown. Although outsourcing was much talked about and practiced among US and European and other developed countries, the trend becomes more important given the more competitive landscape amid financial breakdown and global inflation. The countries, which feel the pinch, are developing countries, which are competing each other for foreign direct investments, particularly in Asian Pacific Region ex-Japan.
Among the famous outsourcing destinations are Bangalore in India and Dalian in China, which cater to US and Japan companies respectively. Since the upgrading of these countries’ design and development capabilities, many high end value chain process have been shifted to these destinations with the hope that the low cost of production will enhance competitiveness. The activities range from software design, call centers, financial analysis, technology development and other proprietary ownerships which are now designed and produced in these destinations. The positive side is, that these activities could help create and promote strong industrial linkages and upgrade the local’s capability.
The apparent benefits to the host countries have much caused the efforts by individual countries to attract investments from overseas, through government protection, tax rebates and other benefits. These efforts intensified in the recent months in view of the slow down of demand from US and other developed countries.