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Myths vs. Realities of Global Sourcing


Myths vs. Realities of Global Sourcing

Axia Sourcing released the following six telling myths and realities related to global sourcing, breaking down common misconceptions about language-barriers, outsourcing partnerships, quality control and more. Global businesses can apply this knowledge to successfully navigate the world of sourcing while expanding business operations with confidence, regardless of the industry.

Global Sourcing: Myth Versus Reality from Axia Sourcing

New Offshore Incorporations Increase in 2013

Los Angeles, CA – New company registrations increased in most offshore jurisdictions in the second half of 2013, according to Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services.

In total, there were 44,615 new offshore company incorporations in the second half of 2013, and the total number of active companies rose to 671,000, according to the firm’s latest On the Register report.

The report provides insight and data on company incorporations in offshore financial centers and is focused primarily on the second half of 2013.

“As the global economy follows a path to recovery, offshore company registration data reveals that levels of new company registrations are up in most jurisdictions during the second half of 2013, with increases of between 5 percent and 10 percent,” said Farah Ballands, partner and global head of Fiduciary & Administration Services at London, UK-based Appleby.

Overall, the report found, the combined total of new offshore incorporations in the second half of 2013 “represents a slow-down compared to the preceding six months,” attributing much of the pull-back to a decline in incorporations in the British Virgin Islands (BVI) – which is the offshore jurisdiction that attracts the most company registrations.

Though it maintained a two-fold lead over its nearest comparator, the Seychelles, the number of new companies joining the BVI register shrank by 17 percent when compared to the first half of the year.

The story of company incorporations, the report said, “is largely positive with the Cayman Islands being the only other offshore jurisdiction to report a decrease in new registrations in the second half of 2013 when compared to the first half of the year.”

However, the report attributed the decrease to a seasonal decline in company registrations and, when looking at 2013 as a whole, Cayman experienced a healthy 5 percent growth.

During the second half of 2013, the Crown Dependency jurisdictions of the Isle of Man and Guernsey revealed the largest increases in new companies joining the registers at 10 percent and 9 percent, respectively, over the previous half.  The number of new companies added to the register in Mauritius, meanwhile, was up 8 percent on the previous period.

The largest year-on-year increase was seen in the Seychelles (29 percent), followed by Bermuda (16 percent), which saw a recent high in new incorporations – more than 1,000 annually for the first time since 2008.

Data for the report was collected from reported figures produced by the national registries of Bermuda, the Cayman Islands, Guernsey, Hong Kong, the Isle of Man, and the UK.

In addition, data available from Jersey Finance, the Central Bank of Seychelles and the Financial Services Commissions of Mauritius and the British Virgin Islands, Seychelles International Business Authority, The US Census Bureau, The State of Delaware, The Federal State Statistics Service in Russia and the State Administration of Industry and Commerce of China was also analyzed.


UK Joins US, China as Top Global Tech Markets

Santa Clara, CA – Technology industry leaders are most bullish on revenue growth in the US, China, and the United Kingdom, according to the results of the annual Technology Business Outlook survey of US-based technology executives conducted by business consultancy KPMG LLP.

The UK ranking is one of the biggest surprises in this year’s survey with 42 percent of the technology leaders projecting that market as their first, second or third highest revenue growth rate for their companies in the next 12 to 24 months, compared to only 18 percent in last year’s survey.

The US remains the No. 1 market, selected among the top three by 81 percent of the respondents – higher than results in the prior three annual surveys – followed by China at 47 percent. The executives were each asked to select their top three markets.

“The jump by the UK is the result of strong economic recovery in the country combined with the effects of tax incentives which have encouraged investment in the tech sector,” said Tudor Aw, head of KPMG Technology Europe.

The findings, he said, “reflect KPMG’s most recent local technology report showing UK tech sector business activity growth at its highest for almost 10 years supported by steep rises in incoming new work and the lowest rate of cost inflation for over four years.”

Interest in Brazil, Mexico and South Korea Declines

Unlike a year ago when Brazil, Mexico, and South Korea appeared on the rise, fewer survey respondents see those three countries as their biggest revenue and employment growth markets.

Brazil’s position as a revenue growth market declined 10 percentage points to 23 percent and as an employment growth market 5 percentage points to 21 percent.

Tech executives’ expectations for their company’s revenue growth in South Korea declined from 14 percent in 2013 to 7 percent in this year’s survey, and for employment growth it slipped two percentage points to 10 percent.

The outlook for Mexico dipped six percentage points to 9 percent for revenue growth, and fell six percentage points to 15 percent for employment growth.

Technology executives believe the US, India, and China will be the leading markets for tech employment growth between now and 2016.

Other countries with higher tech company expectations for employment growth are Canada, at 30 percent up from 23 percent, the UK 28 percent up from 21 percent, and Germany 15 percent up from 7 percent.

Offshoring Outgaining Onshoring

While 58 percent of those surveyed don’t plan to make any changes in how they deploy their manufacturing in the next two years, 24 percent are either moving more manufacturing offshore or incrementally adding new offshore manufacturing.

Eleven percent are either moving manufacturing back or adding new manufacturing operations in the US.

At the same time, 61 percent of the technology executives say their companies are not planning to re-shore non-manufacturing functions. Sixteen percent say they will, and 23 percent say maybe.

The KPMG survey was conducted in the US in March among executives from companies based in the US and overseas with 74 percent represent companies with revenues of $1 billion or more and 26 percent represent companies with revenues in the $100 million to less than $1 billion range.