Last Updated Sep 3, 2008 1:19 PM EDT
India now accounts for half of all offshore knowledge services, followed by China with 28 percent and Russia with 15 percent.
Services of the "knowledge" nature used to be limited to IT support, back office matters such as accounting and customer support. The knowledge part is growing into new areas such as new product development, research and development and analysis.
While Indians, Chinese and Russians seem well suited to handle such tasks, there are problems. The talent pool on the client side may be shallower than expected and managing them is a hard from great distances.
One theme Booz found is that it may be better to seek out smaller offshoring operations since they tend to be more nimble and responsive to needs. They also seem to be able to hire local talent with masters or doctorates in needed fields.
Savvy firms seeking capable knowledge workers in far away lands know how to manage change and share risks in positive ways. "It's not simply about labor arbitrage," says Booz, "it is also about transforming companies into nimble, more flexible entities.
(Image by slimdandy via Flickr, CC 2.0)