Auckland gains on overseas metropolises for ICT delivery

New Zealand making ground on traditional powerhouses in India and China

Auckland is making strides in the increasingly competitive Asia Pacific global delivery market, gaining ground on traditional power cities in India and China, according to analysts IDC.

The researchers’ second, six-monthly Global Delivery Index – Asia Pacific, shows Auckland tied with Shanghai as the fifth most optimal global delivery location, up from tenth last year. Bangalore, Manila and New Delhi have comprised the top three each time.

Despite the ranking improvement, IDC’s senior market analyst for Asia Pacific services research Jenna Griffin doesn’t foresee Auckland breaking into the top five cities in future.

“That’s largely because of scale. Cities that are still up there like Manila, Bangalore, Beijing and New Delhi are all really big cities with big population pools to draw on.”

Griffin says Auckland’s rise is partly due to increased government support through New Zealand Trade and Enterprise for IT exports, as a key part of economic growth. She says although Auckland’s services are not as cheap as they could necessarily be, there are particular areas of local skill such as application development.

Negative impacts on other cities have also helped New Zealand’s cause in the battle to attract offshore spending. The Chinese city of Dalian, for example, has slipped from fifth to ninth place amid a struggle for resources and competition with Beijing, says Griffin. She adds that prices are rising in India and there has been an appreciation in many currencies including the rupee, a telling factor when conversions to the US dollar are made.

Although users remain cost conscious, they are realising the importance of skills in which different cities have particular strengths. Labour costs have also increased across the board, IDC’s report says.

Mumbai fell from fourth position in the last index to eighth, while Sydney dropped out of the top 10 after ranking eighth last time.

The report covers cities in Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, United Arab Emirates and Vietnam.

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