A.T. Kearney 2017 Global Services Location Index Spotlights Automation as Massive Job Displacer

Over the next five years, automation could put a million jobs at risk in four countries. New job creation is at a 1:4 ratio to jobs lost.

September 18, 2017 – Chicago, IL. – A.T. Kearney today released its 2017 Global Services Location Index^™ (GSLI), a study that analyzes and tracks the contours of the offshoring landscape in 55 countries across three major categories: financial attractiveness, people skills and availability, and business environment. The GSLI brings rigor to companies’ decisions about where to locate offshore operations and sheds light on their complex and shifting choices, particularly in the business process outsourcing (BPO) arena.

The eighth edition of the GSLI, titled The Widening Impact of Automation, chronicles the growing threat to BPO jobs in both developed and developing economies—estimating that 1 million jobs are at risk in just four countries—and sheds light on the gap this is creating with the rest of the global outsourcing market. The study’s findings reveal a far bigger change in global employment stability than in shifts in the country rankings. In fact, the top-ranking countries have undergone few changes in position since the 2016 GSLI.

Automation is putting more than a million POS jobs at risk in the next five year in four countries alone: the United States, Poland, India and the Philippines. Tweet

“Though the top three countries have remained in the same order every year since the study’s inception in 2004, we have begun to see a widening gap between #1-ranked India and all the rest, starting with a significantly larger lead over the country ranked second, China,” notes Arjun Sethi, partner and global head of A.T. Kearney’s Digital Transformation Practice and co-author of the study. “But we are now far enough into the trend toward automation to see that substantial job loss is inevitable in all countries involved in the BPO industry, as hundreds of thousands of low-skilled and repetitive jobs are replaced by automation.”

GSLI is the premier ranking of location amenability for companies looking to relocate functions such as financial services, accounting, and customer service, this year’s study also takes a broader view of the likely implications of automation in several types of economies around the world.

“What’s new in this year’s findings is that we see the effects of automation hitting white-collar service profession jobs,” said Johan Gott, A.T. Kearney principal and co-author of the study. “Lower-cost nations have experienced tremendous increases in high-quality employment and transformational economic growth in recent years. Indeed, this has been a large part of their economic development strategy. But now, automation is reversing the flow of countries such as India and the Philippines, which have benefited from labor arbitrage. Our goal is to help companies make sound decisions about which pieces of the activity value chain should use automation and on retooling people into higher-paid jobs.”

2017 GSLI Highlights

• India, China, and Malaysia are once again the top-ranked offshoring destinations, with India pulling way ahead of all other countries.
• Indonesia and Brazil have swapped rankings for 4th and 5th position respectively.
• Mexico fell out of the top 10, while the United Kingdom moves into the top 20, and Peru leapfrogs 27 spots to #20.
• The bigger news, however, is the massive job loss as a result of automation. The study estimates only one new position will be created for every four that are lost.

New job creation is at a 1:4 ratio to jobs lost according to @ATKearney GSLI study Tweet

Notes to editors

About the A.T. Kearney Global Services Location Index^™
Now in its eighth edition since 2004, the 2017 GSLI helps companies make decisions about where to locate their offshore operations and sheds light on their complex and shifting choices. The 55 countries in the 2017 index were selected based on corporate input, current remote services activity, and government initiatives to promote the sector. Each country is evaluated against 38 measurements to assess its financial attractiveness, people skills and availability, and business environment. For the full study, go to https://www.atkearney.com/strategy-and-top-line-transformation/article?/a/the-widening-impact-of-automation.

About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.

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