More than 70 international and regional companies, including ABN
Amro Bank and AXA Insurance, have registered to operate in Dubai's new
outsourcing free zone that opens in December, a top official said.
the Dubai Outsource Zone (DOZ) development was first announced in the
summer of 2004, Dubai Holding, the company behind the project, could
never have dreamed it would be such a success so soon.
companies will offer business process outsourcing (BPO) services mainly
in banking and financial services, information technology, insurance
and the healthcare industries.
Nearly 40 per cent of these are from Europe, 20 per cent from the US and the remaining from the Middle East.
have been surprised by the response," said DOZ executive director Al
Naqi. "The outsourcing business is booming worldwide and we want to
position Dubai as the leading outsourcing destination in the region."
Naqi estimates there would be some 7,000-8,000 people working in the
zone by the end of 2007 and another 5,000 will join each year
Just to give an indication of the success of the
project, the company had originally planned for phase one — a complex
of just five buildings — to satisfy demand until 2008.
in fact happened is that both phase one and two have been completed and
the developers are currently in the process of building phase three.
project, unveiled in June 2004 as part of a plan to boost knowledge
industries in Dubai, hopes to grab a share of the $350 billion a year
global BPO industry with facilities like a zero-tax environment.
Naqi estimates European companies could save up to 40 per cent in costs
and American companies, 20 per cent, by moving business processes to
The Zone hopes to exploit the weaknesses of regional BPO
powerhouses like India, South Africa and the Philippines by reducing
employee attrition, providing high quality infrastructure, an
expatriate-friendly environment and less-interfaring bureaucracy.
want to complement India, which is moving up the value chain and some
of the Indian companies could use this as a disaster recovery zone. We
also have our advantages as we offer a better lifestyle for the
expatriates," Al Naqi said.
Employees will not be allowed to move
jobs within a year of joining a company. Some 60 per cent of the
workers in the zone are expected to come from India, 20 per cent from
East Europe and the remaining from the Philippines and the Middle East.
Naqi said the zone has tie-ups with top recruitment agencies in
countries like India, Jordan and Turkey that will allow businesses to
hire from these countries. Work visas will be approved in 24 hours.
The zone's location close to a university will also help it access a
ready talent pool and it has taken several other steps to keep costs in
check, the principal threat to the BPO industry.
Office space will be available at about a third of the cost in the city proper.
in the zone will start at $1,000 a month and then scale up with the
complexity and the sophistication of the outsourcing operations.
Outsource Zone has a budget to spend up to $200 million in building
infrastructure until the end of 2007 and will create some five million
square feet of office space in the first phase. It expects to recover
investments in 12 years.
Competing with India
believes that for companies wanting to establish outsourced facilities,
Dubai offers a number of advantages that India lacks — particularly in
terms of the country’s infrastructure and the skill levels of its
“We are trying to complement a lot of the weaknesses
of India,” he claims, adding: “India has a lot of weaknesses today, the
infrastructure is not as good as it is supposed to be and it does not
support a multilingual capability.”
“You have a big attrition
rate, a high employee turnover. It’s not an expat friendly environment
where you could have executives move from the US or Europe,” Al Naqi
claims, pointing out that such executives will find it “much easier” to
live in Dubai.
Source: Gulfnews & ITP Technology