CEBU City has been bumped off Tholons' list of Top 10 “super cities” for outsourcing this year.
Based on the Tholons Services Globalization Index (TSGI) 2017 released on Wednesday, June 28, Cebu City's ranking went down to 12th this year from eighth in 2016.
In its report, the global advisory firm did not specify the cause for Cebu City's lower ranking.
Cebu and the city of Pune in India were replaced in the Top 10 list by Sao Paulo of Brazil and Buenos Aires of Argentina, which ranked sixth and 10th, respectively.
Manila, which ranked second in 2016 after Bangalore, India, also experienced a downgrade to the fourth spot. The top three "super cities" for outsourcing this year are Bangalore, Mumbai and Delhi, all in India.
The global advisory firm introduced this year “innovation, startup ecosystem and digital transformation” as key components of its index.
“For the first time, we are introducing digital innovation as our prime gauge, which looks into cities and nations for number of start-ups, start-up diversity, start-up ecosystem and government incentives to promote entrepreneurship and digital transformation,” the report read.
Cebu’s largest business group, the Cebu Chamber of Commerce and Industry (CCCI), said Cebu City's lower ranking provides an opportunity for the city to strongly pursue better initiatives in the development of its own start-up ecosystem.
“We look at the result as an indicator that we have to strongly continue to pursue our initiatives as a chamber to promote innovation and digital technology. This way we will rise and step up our competence alongside other economies and growth markets,” said CCCI president Melanie Ng in a text message.
She assured greater collaboration with Information and Communications Technology, Science and Technology, and Trade and Industry departments.
Their efforts will be aligned with those of the Cebu IT/BPM.Organization (CIB.O), formerly known as Cedf-IT, and the Cebu Innovation Council.
Also this year, Tholons released the Top 50 Digital Nations. The Philippines ranked third in the “digital nation” category after India and China.
“Philippines has been the undisputed leader in customer service, BPM and is home to major multinational corporations and GICs. English fluency among the youth, cultural affinity to US/UK and the growing influence of MNC operations on the country’s economy is significant,” Tholons said.
However, it warned that the Philippine outsourcing industry is “probably the most susceptible” to the digital onslaught and “needs to have a sense of urgency to re-invent itself in this age of digital disruption.”
Aside from the most known players like the Philippines and India, East Europe, China, and Latin America are said to be the biggest leaders in “services globalization,” or outsourcing.
“While most of the smaller countries in the top 20 will find it easier to adapt their model and be more agile in working with clients on digital innovation, however more than half of the workforce in IT/BPO sector in leading outsourcing locations will become irrelevant in the coming few years unless significant reskilling is done. And for an industry this large, making this gigantic shift will be a challenge,” the advisory firm warned.
In recent years, it said the industry has been knocked by digital forces including robotics, artificial intelligence, social media, mobility, big data, digital supply chain, and digital trust. Surprisingly, Tholons pointed out that outsourcing leaders to include India, Philippines and China are being shaken by disruptors like Canada and Israel, while innovators like Brazil and Chile are going to collectively “redefine the leadership for the next decade.”
Tholons’ report considered innovation, workforce and skills, infrastructure and cost, risk and quality of life, and business catalyst as metrics for this year’s research. (SunStar Cebu)