High Cost Services: Are there enough takers
By: Amit Bhushan Date:5th Sept. 2014
The lack of off shoring seems to be hitting Eurozone, though it's a bit early for jury to be out on this. This is because Europe developed itself into a producer and seller/exporter of High cost services which were successfully offered to client's (Institutions including foreign sovereign bodies as well as individuals) across the globe. High brand reputation for a very trustworthy service organization built up dexterously (which also involved support from regulators, academia, researchers, thought leaders & innovators) had a loyal following amongst customers. This is true for tourism as well as financial services like banking, insurance etc. Off course branded manufactures had their role too, however not to the extent manufactures play role in the US or Japan. However, the financial crisis seems to be taking away some sheen of the glory. The crisis hit almost everyone from customers to services producers. The customers first initiated to curtail their expenditures and later started shifting loyalties to other cheaper service providers who are seen to be 'shaping up' in the game.
Since the Eurozone has resisted off shoring, it is handicapped to respond. While innovation in processes and automation has ensured that Eurozone manages to hold fort so far; however high cost of technology as well as high cost local manpower seems to be a challenge in the present circumstances. Eurozone countries especially those at the periphery, presently seem to be engaged to deflate wage levels, though at a slow pace due to the market structure. This may soon lead to competition for evolving enabling regulations to retain and attract jobs, though the process is likely to be much more challenging and painful. Retaining competitive edge/ advantages to maintain businesses might also prove to be an even tougher challenge.
The developing nations to their credit are evolving suitable and trustworthy investment models to draw away some of the money that was being invested with the Eurozone banks and this trend is likely to grow as political pressures build up to streamline things in the emerging nations and investors seem to be engaging with them more directly. The emerging nations were in any way engaging much more directly for past sometime though there were not enough successes unless guided by the mature West. With the continued push for isolation of rouge regimes and tyrant leadership, investors from such countries are likely to find alternative avenues to park surplus or at least make more efforts to push for diversifying investments across geographies/currencies, where weight for 'Eurozone' combine is likely to reduce. If returns for such clients do not keep up with competing destinations for a substantial period, then capital outflows become unavoidable. Internal reforms that help improve the competency or support for off shoring should thus be in offing, or even a mix of both.
By: Amit Bhushan Date:5th Sept. 2014
The lack of off shoring seems to be hitting Eurozone, though it's a bit early for jury to be out on this. This is because Europe developed itself into a producer and seller/exporter of High cost services which were successfully offered to client's (Institutions including foreign sovereign bodies as well as individuals) across the globe. High brand reputation for a very trustworthy service organization built up dexterously (which also involved support from regulators, academia, researchers, thought leaders & innovators) had a loyal following amongst customers. This is true for tourism as well as financial services like banking, insurance etc. Off course branded manufactures had their role too, however not to the extent manufactures play role in the US or Japan. However, the financial crisis seems to be taking away some sheen of the glory. The crisis hit almost everyone from customers to services producers. The customers first initiated to curtail their expenditures and later started shifting loyalties to other cheaper service providers who are seen to be 'shaping up' in the game.
Since the Eurozone has resisted off shoring, it is handicapped to respond. While innovation in processes and automation has ensured that Eurozone manages to hold fort so far; however high cost of technology as well as high cost local manpower seems to be a challenge in the present circumstances. Eurozone countries especially those at the periphery, presently seem to be engaged to deflate wage levels, though at a slow pace due to the market structure. This may soon lead to competition for evolving enabling regulations to retain and attract jobs, though the process is likely to be much more challenging and painful. Retaining competitive edge/ advantages to maintain businesses might also prove to be an even tougher challenge.
The developing nations to their credit are evolving suitable and trustworthy investment models to draw away some of the money that was being invested with the Eurozone banks and this trend is likely to grow as political pressures build up to streamline things in the emerging nations and investors seem to be engaging with them more directly. The emerging nations were in any way engaging much more directly for past sometime though there were not enough successes unless guided by the mature West. With the continued push for isolation of rouge regimes and tyrant leadership, investors from such countries are likely to find alternative avenues to park surplus or at least make more efforts to push for diversifying investments across geographies/currencies, where weight for 'Eurozone' combine is likely to reduce. If returns for such clients do not keep up with competing destinations for a substantial period, then capital outflows become unavoidable. Internal reforms that help improve the competency or support for off shoring should thus be in offing, or even a mix of both.