When selecting European locations for manufacturing centers or Business Process Outsourcing (BPO) offices, Rene Buck, President of Buck Consultants International, advises companies to look for three differentiators before citing a new European facility; talent, technology and connectivity.
Buck, whose firm is one of Europe's leading independent location consulting companies, said emerging business centers like Glasgow/Edinburgh, Scotland and Istanbul, Turkey are among Europe's brightest future development stars. But he added that Sofia, Bulgaria is, "on the rise and will attract a lot of new companies."
A prominent Asia expert, Dennis J. Meseroll, Director of Tractus Asia Limited, a location consulting firm, said companies should look to second and third tier cities that he calls "sleepers," which include Chengdu, China, Orissa, India as well as Ho Chi Minh City/Hanoi, Vietnam. Despite the attractiveness of exotic new Asian and Eastern European markets, Dennis Donovan, Principal of Wadley-Donovan-Gutshaw Consulting, said North, Central and South America, "continues to be very strong," for outsourced call centers and manufacturing centers.
Donovan, a renowned site selection expert, calls places ranging from Dickinson, North Dakota, to Hermosillo, Mexico to Santiago, Chile, among the hottest future investment hotspots in the Western Hemisphere. Donovan told session attendees that, "Honduras is competitive with China on cost," and suggested companies look at locations like that for their relative political and currency stability, as well as a strong pool of bilingual workers.
Despite obvious upsides, like a well-trained labor market or relatively low wages, the panelists all warned companies about to plunge into new markets to avoid pitfalls, such as:
- Herd mentality
- Making location decisions on country-level data
- Relying on secondary data
- Regulatory change, and others
A recent CoreNet Global location decision survey indicated that North America remains the market of choice, followed by emerging markets such as Eastern Europe and Asia. For example, Mark Gorman, Global Real Estate Leader for Nortel, said of Moscow that the Russian capital has "a lot of really cool buildings that architects will love, but get an engineer to show up because there may not be enough power to turn the lights on."
