October 4, 2019 Last updated October 4th, 2019 81 Reads share

Top 5 regions to Outsource Software Development in 2020

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Software Outsourcing has certainly become a global trend in the last few years. Thousands of companies all over the world have already adapted their services in order to provide far-reaching digital solutions. Among a multitude of different options, finding the right provider for your business’s needs can become a bit overwhelming.

If you are already aware of the benefits that outsource development can bring to your business and you feel ready to work with an IT partner, you should also know that outsourcing to different continents has become standard practice. Commonly referred to as Nearshore and Offshore software development, these methods are almost guaranteed to improve product quality, mitigate risks, and free-up company resources so your in-house teams can focus on your core business.

How to identify good regions for outsourcing development

Choosing a software outsourcing company can be quite a task, as the IT market of a region can be valued over several factors. But while some businesses try to focus on lower costs—which in many cases can result in a false economy—, it is often smarter to look for other indicators, which may vary depending on the unique characteristics of a company.

The main indicators for a good outsource development region include socioeconomic characteristics (such as the IT market local development and IT infrastructure), as well as local variants (languages for communication and cultural differences). It is also beneficial to consider time-zone differences, as you could be unknowingly signing up for Skype meetings at practically any time of the day.

Try to consider your business’s specific needs first, and build up from there. While the modern world has no scarcity of talented IT professionals, not everyone is prepared to provide tailored-fit solutions for your particular case.

Here are the Top 5 regions to Outsource Development in 2019:

Latin America (Argentina, Brazil, Mexico and Colombia)

The software outsourcing industry in Latin America is led by Argentina, Brazil, Mexico and Colombia.  LATAM has the highest projected IT industry growth of any region, with a projected revenue growth rate of 5.3% for the 2020s, 2 points above the global 3.3% average.

This context has been recognized worldwide, with investments in tech startups reaching US$ 5.7 billion dollars, mostly from American and Chinese interest. Consumer demand for new technology is also spiking, and the region—which already has a very high internet access rate—is looking to continue investing in IT infrastructure and modern communication networks.

The main reasons are Latin America’s cost-effectiveness, the high English proficiency of the population, and the technology education level in its biggest cities, all key factors that make Latin America the first choice for many businesses. Additionally, the time-zone compatibility with North America makes it a particularly interesting option for the US market, as it allows for fairly accessible real-time communication. 

South-East Asia (Malaysia, Thailand and The Philippines)

South-East Asian countries are home to some of the largest English-speaking populations in the world. Countries like Taiwan are thoroughly focusing on improving the international communication skills of their IT professionals, going as far as to making English one of their national languages.

While this region is often overlooked by many companies looking to outsource development, it should be noted that the local tech firms are more than capable of competing at the world-class tech category. The countries with the biggest economies in the area offer a good business environment with a young and energetic labor market looking to continue boosting its IT outsourcing markets, as investments reached US$ 11 billion in 2018, nearly two times the US$ 5.8 invested in 2017.

Eastern Europe (Poland, Romania, and Ukraine)

Over 1 million developers live and work on Eastern Europe, and over 40% are based in Poland and Ukraine. There is no lack of talent: HackerRank statistics position Poland developers as the third most skilled in the world, ranking first in Java assessments and in the top 5 for mainstream programming languages such as Python, Shell, and Ruby.

Developers are also highly valued in the local market, as most IT professionals earn up to three times as much as the average person in the region. Additionally, time-zone overlaps shouldn’t be a problem, as local companies are known for providing the necessary accommodations to conduct live meetings and maintain fluent communication with their clients.

Middle East (The United Arab Emirates, Dubai, and Egypt)

The Middle East is characterized by its tech-native and savvy population, as more than 50% of the demographic is under 24 years old. This region is a rich breeding ground for software outsourcing, with almost a dozen startup IT companies valued at over US$ 100 million each in 2017.

Moreover, several countries are focusing more on the education of its future developers through the implementation of STEM education programs. But what really makes countries like Egypt shine is their affordability, perhaps earning the spot for the cheapest outsource development solutions on this list. If Middle East countries fit your business needs, you are bound to save a lot of money by working with them.

China

China produces an amazing 4.7 million IT graduates every year, and Chinese developers are often recognized as some of the best in the world, as confirmed by HackerRank. The local IT market is as competitive as it gets, with 35,000 IT firms and 6 million people associated with them in 2017.

Unfortunately, the country carries a major disadvantage: less than 10% of its population is fluent in English, making it difficult to communicate in an international context. It is also worth mentioning that the Intellectual Property laws in the country are known for being quite lax, but this shouldn’t be a problem while working with a reputable outsource development provider.

Summing up

Narrowing your search for the best regions to outsource software development is only the first step of the process. Whichever company you decide to work with, it is always important to establish clear communication systems, as well as a project roadmap.

Remember, there are no rules when deciding which region is best for your software outsourcing development needs. There are companies all over the world perfectly able to deliver solutions per your requirements in terms of pricing, quality, and workflow. As long as you know where your business is standing and what are its goals, finding outsource development solutions will be easier than you’d think. 

Clayton Johnson

Clayton Johnson

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