Despite the attractive outsourcing industries in countries like the Philippines and Indonesia, XMG says ICT spending growth rate is relatively flat because of the lack of government support and incentives in these countries.

The lack of established local venture capital funding, the lack of IT maturity, and the scarcity of qualified and skilled manpower also play a part in slowing down these countries' IT spending.

The scarcity of manpower does not only affect ICT spending. It also affects the growth of the outsourcing industry. The slowdown in growth is mainly due to manpower constraints in offshore locations like India and the Philippines, which account for a significant portion of offshore demand for outsourced ICT services.