lh x cw market report A4_23.03.02 v34 interactive72

BUDAPEST - A KEY BENEFICIARY OF THE NEARSHORING OF BPO’S AND SSC BUSINESSES

Hungary is one of the main beneficiaries of nearshore outsourcing, whereby a parent company located nearby or in relatively close geographical proximity outsources its service activities to an SSC centre. History shows that global economic events are accelerating such cost-cutting initiatives, and Budapest continues to attract international companies, many of which are re-evaluating their future needs and looking for opportunities to reduce costs by relocating more service activities. According to HIPA Business Services Hungary 2021 1 , there are 156 SSCs operating in Hungary, employing more than 70,000 people. Both the number of SSCs and the number of people employed by them increased in 2020 and 2021, meaning that the sector continued to grow in absolute terms even during the pandemic and the sector further increased its relative importance in the Hungarian economy. The SSC sector is expected to continue to grow in the future, with nearly three quarters of the firms surveyed by HIPA planning to expand their activities, most often in IT and finance. As a result, Budapest’s economic growth has been particularly strong in recent times, and the strongest among its Central European peers. It is important to highlight that office employment provides a competitive advantage for Budapest’s economy. Global players in finance, accounting, insurance, and business consultancy provide these jobs, and the pandemic has hardly dampened the ICT industry, which has already overtaken wholesale and retail as the city’s largest industry.

1 https://hipa.hu/uploads/insight/6/3/a/3/63a32d8401992212086137.pdf