New and emerging outsourcing locations are beginning to chip away at India’s market dominance, according to a new survey

The survey of 514 outsourcing service providers in 50 countries, from Duke University's Offshoring Research Network and PricewaterhouseCoopers found that established providers are increasingly facing competition from upstarts in Latin America, Eastern Europe, and Asia.

Emerging economies are increasingly expanding their sector activities, including the Chinese government designating 20 cities as outsourcing hubs to attract more international investment.

However, according to the survey, only 16 per cent of Indian service providers see competitors from other emerging economies as a threat.

"Growing competition has transformed the outsourcing industry into a global race for market share," said PwC Managing Director Dr. Charles Aird.

“India's success as the world's back office has motivated other developing countries with well educated and under-employed populations to seek to duplicate their experience."

Other survey findings include:

• 70 per cent of outsourcing deals in 2008 were renewed at the expiration of the first contract, down from 72 per cent in 2007.

• Unrealistic client expectations and the lack of a client outsourcing strategy were the top reasons for contract terminations.

• "Nearshoring" has gained momentum among companies using or considering outsourcing services.