The tiny island of Singapore is considered one of the most wired countries in the world. In fact, Singapore recently leapt into first place in the global IT economy rankings produced by nonprofit, surpassing the U.S. and Sweden. Singapore earned top marks for its free-trade policies and "visionary government."

Because Singapore has a world-class telecommunications infrastructure and a highly skilled workforce of 2 million people, many global firms choose it for their Asian headquarters, including IBM, Electronic Data Systems Corp. and SAS Institute Inc. Other U.S.-based companies outsource their data center operations and network management to Singapore.

But compared with other Asian locations, Singapore is expensive. Labor rates can be double those of other Southeast Asian countries, according to some U.S. companies that outsource to the region.

Naperville, Ill.-based Ondeo Nalco Co. chose Singapore for some of its offshore outsourcing because the application being developed would be used by Asian employees.

"The applications were very local in their use, and they needed Asian language support. It was better for the requirements to be done by native Asians rather than here in the U.S.," says Paul Gould, group leader for global IT development at Ondeo Nalco. The company chose a small Singapore vendor for the project, and the eight-month engagement went smoothly.

Other U.S.-based companies use Singapore for sensitive operations such as data centers because of a strong telecommunications infrastructure and labor rates that are lower than those in the U.S., explains Atul Vashistha, CEO of NeoIT Inc., an offshore outsourcing advisory firm in San Ramon, Calif.

Singapore outsourcing vendors Jayasoft Solutions Pte. and National Computer Systems Pte. are also known for their applications development, software maintenance and systems integration work.

"Singapore is most expensive, but the trade-off is that it's far more stable [than many other Asian countries], and you don't have to make the infrastructure investment," says Howard Rubin, executive vice president of Meta Group Inc. Americans also feel comfortable with Singapore's free-market economy, which often follows the U.S. economy's lead.

Singapore's government has high hopes of establishing the country as Southeast Asia's financial and high-tech hub. "Their goal is 6 million IT workers," Vashistha says. "Right now, a lot of the labor force comes from outside the country - a lot from India. You're starting to see Singapore companies outsourcing their work to India and China."

Collett is a freelance writer in Sterling, Va. Contact her at

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