Top ten differences between building Asian tech teams vs local teams

At present, Western countries are facing a disastrous digital skills shortage. The high cost of living and demand for high salaries makes recruiting elite talent especially difficult. This can make it especially challenging when building a tech team. Companies often weigh the pros and cons of offshoring their software developers to establish a team of engineers locally.

When looking overseas for tech talent, companies often choose Asia as an offshoring destination due to the fact that it is easy to source top talent to deliver high-quality services. Moreover, Asia also has a high level of English Proficiency. Most Asian countries, such as India, Singapore, the Philippines, Malaysia, and South Korea, rank high on the EF EPI (English Proficiency Index).

So, many similarities exist in the labour market, but in this blog, we are going to look at Asian tech teams vs local teams.

Key differences — Asian tech teams vs local teams

Cost of labour

For Western firms building tech teams locally, especially in the US or Europe, can be unreasonably expensive. Most companies looking to offshore their software development choose Asia when wanting to significantly manage costs.

One reason is that the cost of living in many Asian countries is significantly lower than in the West. Moreover, hiring a professional in Asia is a much more cost effective solution than in the West where software development can cost as much as €69 an hour.

Innovation Capabilities

Local teams may not be capable of delivering the same level of innovation. It’s no secret that Europe’s tech ecosystem lags far behind Asia. Asia is a technological powerhouse.

Compared to Asia, Europe has invested little in venture capital in the last five years and it has seen less innovation and big tech. In areas like fintech, e-commerce, social media, AI, e-mobility, and the Internet of Things, Asian countries are far ahead.

BEST PRACTICES

Partner with an experienced offshore vendor. Choosing the right company to offshore your processes is an important consideration. Selecting an offshore service provider should be based on their core competencies.

Skill level

In Asian cities like Bangalore, companies can source experts from almost every field, from cybersecurity to IoT, telecommunications, and finance. As software development evolves, it requires different kinds of skills and experience. These skills are unfortunately often lacking in Western companies. In Europe and the US, there are increasingly fewer people capable of filling IT roles. Nevertheless, demand remains high but in Asia skill sets are also more layered and advanced than a few years ago.

Depth of Talent

When looking at the pros and cons of building Asian tech teams vs local teams, we can make an obvious conclusion. The number of candidates in Asia vs job requirements far exceeds that of the West. Asia has a staggering population of 4.5 billion people, out of which about half are of prime working age. India, for instance, ranks second in terms of global labour force. Millions of these individuals go on to be undergraduate students and join the workforce annually. This gives you a large, qualified workforce to choose from when offshoring development operations to Asia.

TIP

Now is a good time to build Asian tech teams as Asia is focusing its efforts on economic reform to encourage liberalisation and privatisation.

Economic growth

The U.S. is currently the world’s largest economy but with growth in exports, capital expenditures, and productivity Asia is set to surpass Western nations in GDP within this decade. Many Asian countries have some of the highest GDPs globally, and some of the world’s largest middle-income groups. By the early 1980s, Asia’s share in global exports was less than 20 per cent but rose to 36.3 per cent by 2021. And rising foreign direct investment (FDI) flows from businesses like Nike, Amazon, Google, and other tech leaders have led to fast and stable economic growth resilient enough to weather the economic downtowns that have adversely affected Western economies.

Technological Infrastructure

The West has an impressive technological infrastructure. However, when considering the benefits of Asian tech teams vs local teams it might be helpful to remember that the West has already experienced its technological golden age. Nowadays, its tech infrastructure is ageing. On the other hand, tech adoption is accelerating across Asia. This rapid adoption of technology and new high-tech infrastructure is providing tech companies with the right conditions to thrive. For instance, India has the world’s most advanced digital payment system, which set a record for the most digital transactions worldwide in 2022.

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