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'Nearshore'--the new offshore?

Former Eastern bloc countries and North Africa are challenging destinations such as India for U.K. outsourcing.

"Nearshore" is the new offshore in the United Kingdom, with outsourcers favoring the former Eastern bloc countries and Morocco as opposed to traditional locations such as India, according to a new report.

The report, "Profiting from European Nearshore Outsourcing" from analyst firm Datamonitor, found that companies are increasingly looking to countries such as the Czech Republic when it comes to moving call center operations to lower-wage locations overseas.

The projected growth, however, is still relatively small when compared with the size of the traditional offshore market, particularly in India. Datamonitor forecasts that outsourced call center positions in the European nearshore regions of Central and Eastern Europe and North Africa are set to rise from 4,400 in 2003 to 13,700 by 2008.

To put this into context, the Indian city of Bangalore alone currently employs around 60,000 people in its business process outsourcing (BPO) call centers.


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The nearshore call center market is more mature in the Baltic countries, Poland, Czech Republic, Morocco and Hungary, but Datamonitor predicts that growth in Tunisia, Bulgaria, Romania and the Balkans will be significant, as a result of their friendly investment attitudes and geographic niche-market advantages.

In addition to the Czech Republic, Poland and Hungary, countries that are emerging as viable locations for English-speaking customers include Bulgaria and Morocco, according to the report.

Peter Ryan, a call center analyst at Datamonitor and author of the report, said in a statement: "E.U.-based firms are impressed with Central and Eastern Europe's and North Africa's educated labor pool that is growing in its multilingual capability. An available work force that is located relatively close to major E.U. centers, combined with modern telephony infrastructures work in favor of nearshore call center outsourcing."

Andy McCue of Silicon.com reported from London.