The global and regional outsourcing industry is forecast to grow robustly over the next few years, with the Asia Pacific market expected to expand by 12 percent per year between 2009 and 2014. Malaysia currently captures only 3.9 percent of the Asia (excluding Japan) market, roughly RM3.5 billion per year.
Between 2003 and 2008, the Malaysian outsourcing industry grew by 9 percent, a healthy growth rate but lower than the regional average and significantly slower than regional leaders, such as India (27 percent) and China (16 percent). Malaysian outsourcing companies lag their regional peers because they are small and fragmented, lack niche focus areas, are over reliant on the domestic market and lack a credible track record. The most competitive outsourcing markets globally have one thing in common: they have provided the base for the emergence of globally-competitive companies within outsourcing, such as India’s Infosys, TCS and Wipro. Starting from a strong domestic base, these companies achieved the scale, awareness and credibility to become the largest and most respected companies around the world. Our aspiration is to create at least two globally-competitive outsourcing companies and, in the process put in place the policy incentives and marketing initiatives to allow smaller companies to flourish.
Actions We will work on three fronts to achieve our aspiration. We will reach critical scale by setting up a Government-shared services centre through a public-private partnership and then use policy to grow industry leaders and encourage consolidation. Simultaneously we will work to build global awareness and ensure that customers in target markets are aware of the skills and capabilities of Malaysian outsourcers. To enhance industry capability and credibility, especially overseas, we will raise industry standards and foster greater competitiveness in order to challenge established foreign competitors