The UAE continues to improve on its global ranking, moving up four spots on the Global Services Location Index (GSLI) list this year to 21st place, while Jordan, KSA, Qatar, Kuwait, Oman and Lebanon all join the list for the first time.

Global management consultancy Kearney, which has published its 12th edition of GSLI, studies the vital factors that make countries attractive as potential locations for offshore services.

Home to more than 4,000 start-ups across Dubai, Sharjah and Abu Dhabi, along with multiple free zones, the UAE is emerging as a technology hub for the Middle East and Africa. When it comes to talent regeneration, two dimensions contribute to the scoring: the intensity of technology innovation and the focus on digital skill enhancement, areas where the UAE is focusing significant energy and investment which is paying off. The UAE talent regeneration, combined with the country’s scale and its relations with nearby countries, will all help it to become the location of choice for nearshoring.

The talent regeneration matrix

A key trend in this year’s GSLI is the criticality of talent regeneration. With the emergence and adoption of digital technologies, cost-centric service locations are at risk of losing their competitiveness to more developed and technologically advanced countries as more work and processes will be automated. Talent regeneration, therefore, will serve as the backbone of this shift.

“In an ever-changing global market landscape, where skills take precedence over cost advantages, a nation's true strength lies in its capacity to foster and unleash the potential of its talented people,” says Rob Van Dale, Middle East and Africa Lead, Digital at Kearney.

“While countries such as UAE and KSA do not naturally have a cost advantage, we see that their considerable focus on talent regeneration is starting to pay off, and in a world where this is expected to become more important, coupled with their investments in digital resonance and an already attractive business environment, they may in the near future further increase their attractiveness for high skilled services catering to their region.”

Countries leading the 2023 GSLI

In an era of rapidly evolving technology and ever-changing trends, business services such as information technology, business process outsourcing, and engineering are increasingly being delivered across borders as companies seek to lower their costs, scale their talent, and become more efficient by using more of the global talent base. The global market for business services has also grown from $624 billion in 2022 to $681 billion in 2023, which will increase the demand for such services.

India, China and Malaysia continue to lead thanks to their immense cost advantage, abundant talent pool, and strong skills. Notably, India and China also show signs of strength in talent regeneration capabilities making them global frontrunners in the availability of a tech-enabled workforce.

Geopolitical, economic, and technological forces have spurred significant changes in the global labor market. Therefore, a country’s ability to reskill and redeploy its workforce in response to changing market demands and technological disruptions is key to improving its attractiveness as an offshore location for business services. Talent regeneration will be the most crucial gamechanger as Industry 4.0 continues to reshape the demand for future skills and jobs.

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