1. Research in Brief 17
Morocco’s
offshoring advantage
Mourad Taoufiki, Amine Tazi-Riffi, and
Jonathan Tétrault Serge Bloch
The country is in a position to become the destination of choice for
French-speaking companies.
In an integrated global economy, a around 35 percent, and create a total of
country is fortunate if it can find a com- some 100,000 new jobs.1
parative advantage in an industry where
major positions have not yet been taken. Morocco’s need for new industrial growth
Morocco, within eyeshot of the European is urgent. Competitors with lower costs
Union across the Strait of Gibraltar, has and better access to natural resources are
identified an opportunity to become an eroding the country’s share of the global
offshoring center for Europe’s French- and market for food processing and textiles,
�������Spanish-speaking companies. Our study which together currently represent more
�����������that, from 2003 to 2018, business
shows than half of its industrial GDP and almost
�������������� offshoring in Morocco could
process three-quarters of its exports (Exhibit 1).
add 0.3 percent annually to its GDP growth,
��������������������������������������������������� Without a proactive industrial-development
���������������������������������� deficit by
reduce its international trade policy, we reckon that Morocco’s employ-
ment levels will stagnate, its trade deficit
��������� will increase, and its economy will grow at
less than half the expected rate (Exhibit 2,
����������������������������������
on the next page).
������������������������������������������������������
To identify the most promising growth
opportunities, we analyzed the competitive-
������ ����� �������� ����� ness and global market share of Morocco’s
�������� ������� �������� industries and benchmarked them against
������ �� �� � the competitiveness and market share of
�
������������������� � � � �� a selection of 11 developed and developing
����������������� ��
�� � countries.2 We also studied the impact
������������������ �� of globalization on the value chain of each
�� sector. After simulating the impact of
����������������� �� ��
potential industry strategies on Morocco’s
economy, we found that business process
������������������
�� �� and IT offshoring represented the single
����������� ��
biggest opportunity—an estimated DH30
��� ���������� ������� billion (€2.7 billion), or around 8 percent
of GDP in 2003.
��
����������������������������������������������������������
� ������������������������������������������������
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Morocco’s appeal includes wages for
������������������������������������������������ white-collar workers that are half those in
��������������������������������� �
France, a relatively high proportion of
�����������������������������������������
university graduates, and many citizens
2. �������
18
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who speak French, the second language obstacles are labor laws, the political
in the central region of the country. pressure against moving jobs abroad,
Furthermore, the cost and quality of its and the fact that most existing offshoring
already respectable telecommunications vendors are predominantly English
infrastructure are set to improve further speakers. As these countries recognize
with the expected entry of Spain’s that business process offshoring is
Telefónica as a second fixed-line operator. vital to remaining competitive, however,
The country’s nascent offshoring sector, we expect their market for it to grow
with an estimated current turnover of to about €9 billion in the next ten years.
€85 million, includes some 50 mostly small
providers that will employ a total of about Morocco should establish itself as the
10,000 people by the end of 2005. Still, destination of choice, primarily for
Morocco has captured almost half of the francophone offshoring. To achieve rapid
fledgling market for call centers serving progress, it should focus its efforts on
French-speaking companies. In addition, 10 to 12 niches within selected business
Telefónica has established a captive call processes (accounting and finance and
center in northern Morocco, where Spanish human resources, for example) and IT
is the second language. functions. Morocco is in a strong position:
compared with competitors such as
Business process offshoring has yet to Mauritius, Senegal, and Tunisia, it is
take off in any significant way among geographically closer to France, has a larger
companies in Europe’s francophone and more qualified talent pool, and boasts
countries (Belgium, France, Luxembourg, a better telecommunications infrastructure.
and Switzerland) and in Spain. The main When measured against Eastern European