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Global outsourcing industry converges on Jiangsu

By Song Hongmei (China Daily)
Updated: 2009-06-22 07:50

Last month, Nanjing established an international service outsourcing research center. The research center will work closely with Nanjing University on a program of international service outsourcing development and its particular application to the city.

Nanjing, capital of Jiangsu province, has established an international service outsourcing research center recently as part of its bid to establish the city as the world's leading outsourcing center.

Nanjing currently has more than 330 companies, with a collective total of 70,000 employees, engaged in service outsourcing. Among these, some 20 companies have individual service outsourcing contracts worth in excess of $10 million.

Currently Nanjing's service outsourcing business mainly focuses on the software, animation, biomedicine and industrial design sectors. Last year, software accounted for a 70 percent of the city's total outsourcing sector. Many of the world's leading players, including Microsoft, Hewlett-Packard, INTEL and IBM, all undertook software-outsourcing projects in the city during 2008.

In total, Nanjing's service outsourcing business grew 229 percent year-on-year and generated $800 million last year. The figure accounted for 14.7 percent of the total volume of the country's 20 pilot cities in the service outsourcing sector and 32.6 percent of the total service outsourcing business handled in the Jiangsu province.

McKinsey, the New York-based management consultant firm said, in a report published earlier this year, that despite China's rapid growth in the sector it was still lagging behind India - which currently had a market value some nine times greater than China's. However, the report did hold out some hope and maintained that China still had the potential to become the ultimate market leader.

Companies in Nanjing and throughout China will be looking to make McKinsey's predication a reality with the value of the international service and software outsourcing business expected to hit $1.6 trillion by 2010.

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