Geo-Political Risks & Business Climate of Nearshore & Offshore Call Centers
by King White, on Apr 6, 2023 8:00:00 AM
Geo-political risks include corruption, terrorism, security and political stability
Companies typically have to make a significant capital investment of between $5,000 to $10,000 per workstation (construction, furniture, equipment, shared amenities, etc.) when expanding into new international geography which makes it critical to assess the risks of losing that investment. Their assessment should include evaluating geopolitical factors such as corruption, terrorism and political stability in addition to traditional labor factors. As a result, it is important to review unbiased independent ranking data, like that included in the below table, as well as conduct original market research when evaluating these factors.
Identify the business climate factors specific to your project
You should consider business climate factors that are based on project type and your company profile. Some of the typical factors include labor laws and tax conditions while some of the more complex factors include data security and patent rights. It is critical to identify which factors are important to your project before embarking on the site selection process so you understand what data and information are needed to properly evaluate a location’s business climate.
Comparison of nearshore and offshore locations
The following table compares some of the hottest onshore, nearshore and offshore locations based on several critical geo-political risk factors that are often utilized when looking to open a new call center, shared-service center or related back-office operation.
Geo-Political Risk & Business Climate Comparison
City |
Country |
Terrorism Incidence
|
Perceived Level of Public Corruption |
Political Stability & Absence of Violence / Terrorism |
Safety & Security Index |
Efficiency of Legal Framework |
|
Sofia
|
Bulgaria
|
99.9
|
43
|
2.96
|
76.72
|
3.3
|
|
Bogotá
|
Colombia
|
85.6
|
39
|
1.59
|
37.23
|
3
|
|
San José
|
Costa Rica
|
100
|
54
|
3.37
|
77.15
|
3.7
|
|
Zagreb
|
Croatia
|
100
|
50
|
3.21
|
86.8
|
1.9
|
|
Prague
|
Czech Republic
|
99.8
|
56
|
3.46
|
90.74
|
3.5
|
|
Santo Domingo
|
Dominican Republic
|
99.9
|
32
|
2.64
|
61.66
|
3.3
|
|
Cairo
|
Egypt
|
41.6
|
30
|
1.48
|
43.56
|
3.9
|
|
Guatemala City
|
Guatemala
|
100
|
24
|
2.11
|
60.67
|
2.7
|
|
San Pedro Sula
|
Honduras
|
99.9
|
23
|
1.89
|
55.7
|
3.2
|
|
Budapest
|
Hungary
|
100
|
42
|
3.36
|
83.41
|
3.4
|
|
Mumbai
|
India
|
26.3
|
40
|
1.88
|
50.67
|
4.1
|
|
Kingston
|
Jamaica
|
99.9
|
44
|
2.72
|
60.64
|
3.6
|
|
Kuala Lumpur
|
Malaysia
|
99.3
|
47
|
2.64
|
71.64
|
5.1
|
|
Mexico City
|
Mexico
|
98.1
|
31
|
1.86
|
43.87
|
3
|
|
Managua
|
Nicaragua
|
99.9
|
19
|
2.03
|
62.03
|
2.3
|
|
Lagos
|
Nigeria
|
N/A
|
24
|
0.72
|
38.56
|
3.1
|
|
Panama City
|
Panama
|
100
|
36
|
2.79
|
76.82
|
3
|
|
Manila
|
Philippines
|
26.7
|
33
|
1.57
|
44
|
3
|
|
Kraków
|
Poland
|
99.9
|
55
|
3.01
|
88.37
|
3
|
|
Bucharest
|
Romania
|
100
|
46
|
3.03
|
84.15
|
3.9
|
|
Cape Town
|
South Africa
|
97
|
43
|
1.79
|
51.02
|
4.6
|
|
Tunis
|
Tunisia
|
97.7
|
40
|
1.8
|
58.9
|
3.7
|
Data Variable Definitions & Ranking Methodology
Terrorism Incidence
Assesses the frequency and severity of terror attacks. The scale ranges from 0 (highest incidence) to 100 (no incidence).
Perceived Level of Public Sector Corruption
From the Corruption Perceptions Index. The Corruption Perceptions Index measures the perceived levels of public sector corruption in countries and territories around the world. Countries are scored on a scale of 0 (highly corrupt) to 100 (very clean).
Political Stability and Absence of Violence/Terrorism
The likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism. Estimate gives the country’s score on the aggregate indicator ranging from 0 (more likely) to 5 (less likely). This metric was originally collected on a scale of -2.5 to +2.5. Data values are rounded to two decimal places. Not every metro has a value.
Safety & Security Index
The Safety & Security Index measures a country’s performance in three areas: national security, personal precariousness and personal safety. The index measures various safety and security factors within countries including; food availability, shelter availability, violence (war/murder), terrorism (violent/political), safety of property, road deaths and nighttime safety. The Safety & Security Index is a component pillar of the Legatum Prosperity Index. The scale ranges from 0 (worst performance) to 100 (best performance).
Efficiency of Legal Framework
The efficiency of the legal framework for private businesses in settling disputes (1= extremely inefficient; 7= highly efficient).
Data Source: Legatum Prosperity Index, Transparency International, World Bank Doing Business, World Economic Forum
