Suzhou, Home to China’s Largest Service Outsourcing Industry

Service outsourcing has helped Suzhou transform from a city that manufactures to a city that creates. The industry began in the early 1990s and has expanded rapidly since the 2000s. Within two decades of the industry’s expansion, the amount of offshore service outsourcing in Suzhou has increased to an impressive record of 9.1 percent of China’s total volume in terms of contract value. According to the Bureau of Commerce and Trade, there were only 412 service outsourcing companies providing services worth of US$300 million in late 2007. By late 2012, the total contract value had increased ten-fold to US$3.05 billion.

The industry has benefited from strong government support. With the service outsourcing industry high on the Suzhou Municipal Government’s agenda, Suzhou set up the first Intellectual Property Rights Protection Center in Jiangsu Province to help arbitrate the intellectual property concerns of the service outsourcing businesses. At the same time, in order to continue generating skills and attracting talents for the industry, the first software and service outsourcing professional college in China was also established in Suzhou.

Service outsourcing helps businesses to perform their core business activities more effectively, and enables faster growth. Small to medium-sized enterprises (SMEs) with scarce internal resources can outsource several functions, including accounting and payroll, so they can better focus on their core business.

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