Outsourcing represents a significant industry that contributes to the GDP of the global economy. Recent research institutes such as NASSCOM, Everest Group and Forrester expect this particular industry to grow exponentially over the upcoming years. Especially in the US, the value of outsourcing is recognized by the government and numerous companies who already outsourced parts of their services to an external provider. According to the president Barak Obama, after an official visit to India at the end of last year, outsourcing “is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards.”

Nevertheless, besides offshore outsourcing, more and more US-based companies decide to use the advantages of near shoring. Latest research results from the BDO Technology Outlook Survey 2011 by a US based accounting and consulting organization reveals that US companies heavily count on the trend of near shoring in the future. 58% of the survey respondents indicate that their future plans on outsourcing activities will involve merely companies that are on the same continent. This article provides an overview on the near shoring industry in the Americas.

Why do American companies increasingly decide to outsource to neighbor countries such as Mexico, Costa Rica, Panama and co? One of the major reasons simply is proximity and the related advantages. US clients enjoy business engagements with partners who are in similar time zones, share similar business hours and are maximally a couple of flying hours away from major cities in the US. This safes valuable business travel time, prevents jetlags and makes general communication easier.

Currencies of Latin American nations are generally weaker against the US dollar. Additionally low labor costs in the region therefore offer great cost-advantages in the outsourcing sphere. Many US companies are using these outsourcing contracts to these destinations as a general gate to Latin American trade relationships and Spanish speaking professionals. The US government further encourages trade in the Americas. The Central American Free Trade Agreement, for instance, make it especially lucrative to outsource to Latin American countries from North America. According to recently published Gartner research, Latin American nations that made it in the rankings of the thirty top outsourcing locations in 2011, are Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama and Peru.

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