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31 cities with outsourcing potential

Eclectic mix of cities worldwide will challenge today's best-known outsourcing centers in China and India, according to a new report.

Forget Chennai and Mumbai. The outsourcing hubs of tomorrow will be in Guadalajara and Gdansk.

An eclectic mix of 31 cities worldwide will challenge today's best-known outsourcing centers in China and India, according to a new report from professional services giant KPMG.

Faced with overburdened telecommunications infrastructure and overstretched labor markets in traditional offshore locations, these cities are among the alternatives that should be considered by companies, the report says.

The report found that the new cities in the Asia-Pacific region offer lower costs, younger populations, and government incentives such as easy work permits, while those in Europe, Middle East, and Africa promise robust telecommunications and power infrastructures and niche specialization in fields such as data management.

Meanwhile cities in the Americas can draw on large labor pools, a more mature service offering, proximity to major client bases, and multiple language skills.

Size is not a deciding factor among these emerging cities on the list. The cities range from tiny Port Louis in Mauritius with 130,000 residents to the metropolis of Buenos Aires, home to almost 13 million people.

A more important factor is the proportion of computer graduates, the number of research and development institutions, the rate of migration to the cities, and common languages with their target markets.

The full list of cities:

• Boise, Idaho, USA
• Buenos Aires, Argentina
• Calgary, Alberta, Canada
• Campinas, Brazil
• Curitiba, Brazil
• Guadalajara, Mexico
• Indianapolis, Ind., USA
• Queretaro, Mexico
• Santiago, Chile
• Winnipeg, Manitoba, Canada

• Ahmedabad, India
• Brisbane, Australia
• Changsha, China
• Davao City, Philippines
• Hangzhou, China
• Ho Chi Minh City, Vietnam
• Iloilo City, Philippines
• Jaipur, India
• Nagpur, India
• Penang, Malaysia

Europe, Middle East, Africa
• Belfast, Ireland
• Belgrade, Serbia
• Cairo, Egypt
• Cluj-Napoca, Romania
• Gdansk, Poland
• Lviv, Ukraine
• Port Louis, Mauritius
• Rostov-on-Don, Russia
• Sofia, Bulgaria
• Tunis, Tunisia
• Zagreb, Croatia

Nick Heath of reported from London.