Best country for software development outsourcing in Asia

Software development outsourcing to Asia has been growing steadily over the past four decades but has seen rapid growth since the COVID pandemic. With outsourcing costs anything up to 75% lower than hiring locally, Asia is definitely at the forefront of the outsourcing industry.

The problem with outsourcing to Asia, however, is that it consists of 48 countries and three territories, so where do you start? At Outsourced, we’ve done all the work for you, comparing the top six countries in Asia for software development outsourcing: the Philippines, Malaysia, India, Vietnam, Indonesia, and Thailand.

Comparisons were made on four essential outsourcing criteria: English proficiency, western cultural similarities, cost savings, and education and intelligence. These were ranked from best to worst with a score of six being the highest and one being the lowest.

English proficiency

English proficiency was based on the EF EPI Proficiency Index 2021 which provides a quantitative and qualitative score (first and second rows in Figure 1, respectively); rankings were allocated according to these scores (shown in bold in the last row of Figure 1).  The higher the score, the greater a county’s English proficiency.

The Philippines tops our list because English was introduced during the US colonial occupation in the early 1900s and has become their second official language.

Figure 1: English proficiency scores and rankings. Score from 1 to 6 with 6 being the highest score/winner.

Western cultural similarities

Comparisons between a country’s national culture and western culture were important because it provides a measure of how easily outsourced employees can collaborate with your in-house team, from a cultural point of view.

The comparative score for western culture was based on the Hofstede Insights Country Comparison and calculated as the average score for Australia, the UK and the US. This average score was then compared to each of the six country’s scores and the differences were ranked (Figure 2). The smaller the difference, the higher the ranking.

Figure 2: Cultural similarities. Score from 1 to 6 with 6 being the highest score/winner.

Cost savings

For the cost savings expected by companies who outsource their software development to Asia, we used the average base pay per month estimated by Glassdoor in each of the six Asian countries and compared these results with the equivalent salary in the US. This provided the following dollar savings and subsequent scores (Figure 3).

Figure 3: Cost savings (USD). Score from 1 to 6 with 6 being the highest score/winner.

Education and intelligence

Education and intelligence were obtained from three sources: QS Higher Education System Strength Rankings, Education Rankings by Country and World Population Review. The scores for all three criteria were totalled and ranked to provide one single score for education and intelligence.

QS Higher Education System Strength Rankings

This report highlights the nations with the world’s strongest higher education systems. Comparing national performance in four areas, the rankings were based on system strength, access, flagship institution performance, and economic context (Figure 4). 

Figure 4: QS Higher Education System Strength Rankings. Score from 1 to 6 with 6 being the highest score/winner.

Education Rankings by Country

The Education Rankings by Country are based on the Best Countries Report which surveyed thousands of people across 78 countries. To score the education systems of each country they asked respondents three questions (shown below); the higher the score the greater the ranking (Figure 5).

• Did the country have a well-developed public education system?
• Would they consider attending university in the country?
• Did they believe that the country provides top-quality education?

Figure 5: Education Rankings by Country. Score from 1 to 6 with 6 being the highest score/winner.

Average IQ

The scores shown in figure 6, were originally published in a 2019 study by Richard Lynn and David Becker at the Ulster Institute and later included in the World Population Review mentioned above.

Figure 6: Average IQ. Score from 1 to 6 with 6 being the highest score/winner.

Cumulative scores for education and intelligence

The top row in figure 7 shows the cumulative scores for figures 4, 5 and 6; the bottom row in figure 7 shows the rankings based on these cumulative scores. These results indicate that for the education and intelligence criteria, the Philippines and India tie for first place, whilst Malaysia and Indonesia tie for second place.

Figure 7: Cumulative education and intelligence scores and rankings. Score from 1 to 6 with 6 being the highest score/winner.

Final results of six country comparisons in Asia

The final result (shown in Figure 8) indicates that the Philippines scores the highest, based on the cumulative score across all essential criteria for outsourcing software development to Asia. These criteria are English proficiency, western culture similarities, cost savings, and education and intelligence.

Figure 8: Final scores indicating the best country for software development outsourcing in Asia. The highest score wins.

For help with software development outsourcing in the Philippines, why not contact Outsourced today – we are the leading provider of full-time, dedicated staff in the region.