Offshore software R&D

Offshore Software R&D is the provision of software development services by a supplier (whether external or internal) located in a different country from the one where the software will be used. The main reason behind companies using offshore software development services is the higher development cost of the local service providers. The global software R&D services market, as contrasted to ITO and BPO, is rather young and currently is at a relatively early stage of development.

While India, Ireland, Canada and Israel were the four leading countries that controlled this business in 2003, the percentages shifted by 2009 when the front-runners, India and the Philippines, had a combined share of the world market for business process offshoring of about 50 percent. The UN Information Economy Report 2010 reads that "the second largest exporter, Canada, continued to shrink to 21 percent by 2009. Beyond these top three locations, several economies from all continents are making inroads as offshoring destinations. The group of "other destinations" in figure III.5 surged from 4 percent in 2004 to 16 percent in 2009. The main such locations in 2009 included China, Thailand and Sri Lanka in Asia;26 and Argentina, Brazil, Costa Rica and Mexico in Latin America. On the African continent, Egypt, Mauritius, Morocco and South Africa all have more than 10,000 offshore jobs in the IT and ICT-enabled services sector (Everest Research Institute, 2009). The share of countries in Central and Eastern Europe was unchanged at 6 percent between 2008 and 2009." According to Gartner Group, only these four countries are capable of scaling up enough to meet the demands of large-scale projects. Brazil has been attracting attention due to the closer timezone to the US eastern cost, besides closer cultural affinity. Other offshore software development destinations include Western Europe (Portugal), Central Europe (Poland, Czech Republic, Slovakia, Hungary, Serbia, Croatia, Bosnia and Herzegovina), Eastern Europe ( Romania, Ukraine, Belarus, Russia), Asia (Armenia, Pakistan, Nepal, Vietnam, Bangladesh, Sri Lanka), Africa ( Egypt, Morocco), South America ( Argentina, Bolivia, Chile), and Philippines.

...
Wikipedia