A.T. Kearney Global Services Location Index
Definition
A.T. Kearney Global Services Location Index
The A.T. Kearney Global Services Location Index is an annual ranking of countries as offshore service destinations. It scores potential, not performance, comparing places on cost, on people and on operating conditions rather than on the results actually delivered.
The index has been running for two decades, which is its real value — a single year’s ranking is interesting, while the movement of a country across several editions tells you something.
Buyers use it as a first filter on geography. It answers “which countries should we look at” and never answers “which provider should we pick” — a distinction people routinely collapse.
The index also measures countries, not cities — and delivery happens in cities. A country can rank well on national averages while its only viable delivery city is already expensive and tight on talent.
Key takeaways
- The index ranks countries as potential offshore service destinations.
- It scores national conditions, not individual provider capability.
- Multi-year movement is more informative than any single year’s position.
- Country-level scoring hides the city-level realities that determine delivery.
How it works
Countries are scored against weighted categories, the scores are combined, and the results are published as a ranked list. Methodology has evolved, and the category set has expanded as digital delivery changed what makes a location attractive.
An academic summary describes the index as a tool to help companies understand and compare the factors that make countries attractive as potential locations for offshore services.
That same summary records the index measuring viability on financial attractiveness, on people skills and availability, and on the business environment.
That three-part structure describes the index’s original shape, and the published methodology has since been extended. The index itself is published by Kearney, which remains the authoritative source for the current category set and weightings.
| Category | What it captures | What it cannot see |
|---|---|---|
| Financial attractiveness | Wages, infrastructure cost, tax | Actual rates a provider will quote you |
| People skills and availability | Graduate output, experience, language | Whether those people are already employed |
| Business environment | Stability, regulation, infrastructure | Local variation between cities |
| Digital measures | Technology adoption and readiness | Whether your specific skills exist locally |
The trade backdrop explains why the exercise matters. Services now account for roughly half of world trade measured in value-added terms, according to the World Trade Organization, so location choice is a significant commercial decision.
The unflattering limitation is that national rankings reward large, cheap countries. A small, expensive market with exactly the specialist skill you need will rank poorly and may still be the right answer for your particular requirement.
Examples
The index is most useful early, when the geography is genuinely open and a buyer needs to narrow a long list. Each arrangement here is one somebody runs, which is the only test that was applied.
A manufacturer opening its first offshore site uses the ranking to cut a list of thirty countries to six, then researches cities within those six.
A buyer notices a country climbing steadily across five editions and investigates why, discovering a graduate expansion that has not yet reached provider rates.
A financial services firm ignores the ranking entirely for a regulated workload, because data residency rules decide the location before any scoring can apply.
A team comparing Poland outsourcing with Vietnam outsourcing finds the index separates them on cost while saying nothing about the language mix each offers.
Related terms
Location strategy uses several overlapping terms, and the entries below mark what each one actually covers. Each line here defines one thing and quietly rules out the most obvious confusion.
- global outsourcing: contracting services across borders, the practice this index informs.
- offshore outsourcing: delivery from a distant country, usually across several time zones.
- nearshore outsourcing: delivery from a nearby country in a compatible time zone.
- India IT outsourcing: the market that has topped this ranking for most of its history.
- Philippines BPO: the voice-led market that ranks on people rather than on engineering.
- Vietnam outsourcing: a cost-led market that has climbed steadily in recent editions.
- Poland outsourcing: a European market ranking on skills and stability rather than price.
FAQ
What does the index measure?
National conditions that make a country attractive for offshore services, including cost, workforce availability and the operating environment.
Does it rank providers?
No. It ranks countries. Provider capability is assessed separately, through references, site visits and analyst research on vendors.
How often is it published?
It appears as a periodic edition rather than strictly every year, so check the publication date before treating a ranking as current.
Why do rankings differ between publishers?
Because each index chooses its own categories and weightings. A cost-weighted index and a skills-weighted one will produce different orders.
Should a high ranking decide my location?
No. Use it to narrow a long list, then test at city level where wages, attrition and specific skills actually vary.
What does the index miss?
City-level variation, regulatory constraints specific to your industry, and whether the skills you need are already committed to other employers.
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