This Research Update features MGI's new work on offshoring of services. We also cover the economic impact of offshoring of services on France's economy, the implications of aging populations for savings in Japan and Europe, India's and China's financial markets, and how poor regulation around the world limits economic productivity and growth.
The Emerging Global Labor Market A three-part series examines the global supply and demand for offshoring of services in specific industries, occupations, and economies. New analysis reveals the forces at work in offshoring, and the implications for wages, employment, and company decisions for selecting locations.
Part I - The Demand for Offshore Talent in Services looks at the potential and actual demand for remote talent in eight sectors. While 11 percent of the 1.46 billion service jobs worldwide could be performed remotely, only a small fraction of employment that could potentially go offshore will ever do so. Read more
Part II - The Supply of Offshore Talent in Services analyzes the labor and talent pool available in 28 low-wage countries and another 8 mid- to high-wage ones. On the supply side, developing countries produce far fewer graduates suitable for employment by multinational companies than raw numbers of graduates might suggest. Read more
Part III - How Supply and Demand for Offshore Talent Meet examines the fit between likely demand and potential suitable supply of remote labor and implications for employment, wages, and location selection. MGI found that wage levels for occupations like engineering and generalists could double in low-wage countries, but will remain about 30 percent of wage levels for the same occupations prevailing in the U.S. or Western Europe. Read more
The full reports, sector cases, an interactive exhibit, and an audio MP3 article are available on MGI's web site.
How Offshoring of Services Could Benefit France In France, new MGI research pinpoints the need for greater labor market flexibility if the country hopes to benefit from offshoring. MGI assessed the impact of offshoring on France's economy and found that for every euro of spending on corporate services moved offshore, France earns back € 0.86. Read more
Getting Regulation Right "Regulation that's Good for Competition" illustrates how poor regulation limits global economic productivity and growth, particularly in developing countries, and offers guidelines on getting it right. The research draws on the findings of more than a decade of MGI research on the drivers and inhibitors of productivity and the latest thinking from McKinsey's Strategy Practice. Read more on the McKinsey Quarterly site
Comparing India's and China's Financial Systems India's stock of financial assets, reflecting the degree of monetization and its supply of intermediated capital, is just one-sixth the size of China's total, according to new MGI research. Size isn't everything, of course; a financial system's efficiency in allocating capital is equally important. On this measure, India would appear to have some advantages. Read more on the McKinsey Quarterly site
Aging and Savings in Europe and Japan Two articles examine the impact of demographic pressures on Japan's and Europe's economy. By 2024, in the United Kingdom, Germany, and Italy - three of Europe's largest economies - household financial wealth will be $4 trillion less than it would have been if historical growth rates had persisted. In Japan, the shortfall will be $8 trillion. If left unchecked, the coming slowdown in financial wealth in these countries could depress investment, economic growth, and living standards. Read about Europe on the McKinsey Quarterly site Read about Japan on the McKinsey Quarterly site
Get and manage periodic research update e-newsletter and alerts. Read more
Get RSS feed and Podcasts.
Free, onetime registration is required to download MGI publications. Register now
McKinsey Global Institute 2006 Research in Review December 2006 Read more
Preparing for a Massive Middle Class in China… Comparing the Financial Systems of China and India …Advance Copies of MGI Anthologies From Harvard Business School Press November 2006 Read more
The Value of financial system reforms in China and India…China’s emerging middle class…Mapping the global capital market…Smarter offshoring June 2006 Read more
