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Why the Young Benefit Most from Outsourcing in Asia

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The Young and Outsourcing in Asia

Are you aware that Asia’s young population is seen as a huge business opportunity including for outsourcing in Asia? The young population in that part of the world has favorable conditions for many companies that are looking to tap the regional market. Obviously, such a new and young market can produce generous amounts of customers. So why will the young benefit most from outsourcing?

An Ageing Population

What causes a population to age? Most of the time this can be attributed to rising life expectancies, increased immigration, and of course, decline in birth rates. The effects of an aging population  can have tremendous effects on the economy as well. Why?

For one, this can translate to an ageing workforce with many laborers quickly approaching retirement age. A shortage in the number of available workers can result in increased government spending because of the need for more healthcare and the pension demands of retirees.

The weakened workforce can make international businesses to shop for other alternative sources for expansion. Hence, the need to outsource to destinations with a younger population.

The Young Population

Let’s accept the fact that a younger population creates a steady supply for the workforce particularly for companies outsourcing in Asia. This holds true for suppliers, manufacturers, and even companies that are looking to source products. Take China for example, the aging population is making it more difficult to fill the positions in the factories. However, the younger population of its neighbors does give it a pool of possible workers that can help the factories continuously running and eventually lower the cost of operation.

Does this huge supply of manpower provide an advantage? For those looking to outsource services or products, this can be a gem. Look at how many of the business process outsourcing (BPO) companies  have ventured into the Asian region. The result, tremendous growth in software and IT outsourcing that allows competition on a global scale. What is the role of the young population? The deliver the human capital that the outsourcing companies require.

Just how young is the population in Asia? For Southeast Asia alone, about 600 million people that live there are aged under 30 years old. Compared to North America and Europe, this is a very young population. Surprisingly, the population in Western and South Central Asia is even younger. With this young population joining the workforce, they gain disposable income that they are ready to spend. In this context, they readily become consumers of the products that are outsourced.

Production Zone

Aside from the favorable young population, Asia is also viewed as a better production zone compared to Latin America, Africa, and other regions with young populations. Why? The strategic location of Asia makes shifting of production easier.

Another reason is that the area presents a growing market needed by finished goods, which can reduce the costs involved in transporting goods from the factories to the market. With the younger and brand-conscious population in the region, consumers are hungry for more products. It is important to realize that eventually, the region may age, so the best time to seize the opportunity is now, while it is still open. The companies that take advantage of this will surely be in an excellent position for years to come.

Selecting the Market

The entire Asian region does not have a young population. Thailand and Singapore for example have comparatively older populations to that of Cambodia, Lao PDR, and the Philippines. This is perhaps one of the reasons why the Philippine market has been hugely tapped by companies who are outsourcing in Asia.

In a World Bank Economic Update, it revealed that some Asian countries are going through a shift that is characterized by the aging of its population. So as these neighbors become affected by the decline of its workforce and impacts its economy, it begins to look to its neighbors that have a younger and more vibrant workforce. At the center of it all is the Philippines.

Aside from the younger workforce, the Philippines also has a well-educated manpower sector which is one of the motivations for companies that are looking to expand in the country and the entire region as well. In essence, the Philippines can be a good example on how companies who are outsourcing in Asia  can look to a young population as a business strategy.

Aging Faster

Why is it necessary to take advantage of the young Asian workforce now? According to the same report, the East Asian population is also aging faster compared to other regions. This growth can mean that there will be very few Asian countries that can maintain a young population.

China, Japan, and Korea represent some of the aging populations in Asia. Vietnam and Indonesia, which belong to the younger population today will begin to experience rapid aging within the next 10 years according to the World Bank report.

Does this mean that the Asian outsourcing market will dry up soon? Not exactly. This is because of some countries will continue to enjoy and provide a younger workforce for many decades to come. As this happens, we can expect more businesses to establish their offices in these areas. Provided that the investment climate in the chosen destination remains favorable, there is no doubt that the young population of Asia will continue to benefit from the outsourcing industry.

Other Factors

Businesses will also rely on the investment upgrades that the country receives from banking institutions. The business growth will definitely result in a rise in the interest of investors to go to these Asian countries with younger populations. This is not something that will happen in the near future, but rather, something that is currently occurring and being experienced by the outsourcing industry.

Taking the Philippines as an example, the outsourcing industry in the country has been consistently growing at the rate of 20% per annum for several years now. With the industry being dominated by a young and well-educated workforce, it has become the dominant sector in the country.

What is happening now is that the outsourcing industry is growing so fast, there is a need for the academe to catch up. Some of the young workforce of the outsourcing industry have barely made it out of college, but this does not mean that they are less educated than their graduate counterparts.

However, what this translates to is that more and more young people are getting the purchasing power that is helping the economy and companies that are tapping the huge potential of the Asian market. The expectation is this trend will continue for many years to come with more opportunities opening up.

This is why the young will benefit most from the growth in companies outsourcing in Asia.


Based in Taipei City, Taiwan – Young Go!. We use theatre as a portal to reach, teach and unlock the creative ability of youth. We work with thousands of teenagers each year, focusing on personal growth and supporting strong peer and community relationships.


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