Introduction

As location selection decisions become more complex with over 150 sourcing destinations across the globe, investors look at multiple factors ranging from talent availability to macroeconomic risks and cost savings for due diligence of any location. Cost savings still remain an important motivator and hence, the importance of evaluating impact of government incentives on cost competitiveness of the location.

Governments across locations offer various forms of incentives which can be broadly categorized under four most commonly adopted models. Apart from the standard incentive models, countries also offer business development support through various ecosystem development initiatives, which impact the overall operating cost of the investors.

Establishing the implications of incentives on business decisions has been a challenge till now. This report highlights the significance of incentives and aims to provide an approach to quantify their monetary value while assessing their impact on cost competitiveness of key offshore/nearshore locations.

Scope and content

This report presents views on the following topics:

• What are the most commonly adopted incentive models?
• What is the approach to benchmark incentives on per unit basis?
• How does incentives impact the cost competitiveness of a location?
• What should be the key considerations for decision makers while evaluating the impact of incentives?