349
The Offshore Services Value Chain
Figure 9.4 Actual and Potential Adoption of Offshore Practices
Auto
1
3,084
4
3,373
4 Health care
59,501
21
65,560
20 Insurance
12,193
38
11,723
371 IT services
700 10
Pharma
6,278
21
6,888 1,731 1,989
28 Retail Retail banking
147,461
42
155,961 13,017
93 302
Packaged 37 software 105
12,659 595 390 2003
2008
theoretical maximum global resourcing potential
global employment
Source: McKinsey Global Institute 2009. Note: Adoption of offshoring assesses the current and projected levels of offshoring to low-wage countries within a sector. Theoretical maximum global resourcing potential describes the percentage of a sector or function that may be performed remotely. Global employment is measured in thousands of jobs.
has demonstrated rapid growth. However, the dotted bar presents the vast opportunities that still exist to offshore activities across different industries. The graph also highlights the emergence of new segments in the GVC, including industry-specific offshoring in retail banking and the health care industry. Nonetheless, global employment in offshore services had already reached 4.1 million by 2008 (McKinsey Global Institute 2009). This growth is being driven by an increasing number of business procurement services abroad to improve their efficiency levels in the global economy, enter new markets, and gain access to strategic assets in other countries (Lopez, Ramos, and Torre 2008). They are attracted to developing countries by competitive advantages, such as low human resource costs, technological skills, and language proficiency (AT Kearney 2007), as well as time zones and geographical and cultural proximity to major markets (ECLAC 2008).