The Coming Off Age for Global Innovation Centers

The value addition provided by Global Innovation Centers (GICs) to various industries including Banking, Financial Services, and Insurance (BFSI), technology, telecommunications, etc. and in assisting the digital transformation of parent organizations has been known for years.

However, as demands for innovation push the capabilities of various companies, and as the move toward work-from-anywhere or remote work arrangements intensifies, there has been a considerable change in the nature of GICs. They are fast evolving into innovation-led global excellence arms that are traversing the changing contours of the global business landscape and are no longer just auxiliary units of their parent organizations.

Innovation has literally become the center of the GIC revolution and is no longer just a trendy word. GICs are in a position to develop, design, and deploy cutting-edge solutions because they have access to a global talent pool and the essential domain expertise.

Their strong adherence to the goals of parent organizations and a flexible, global operating model, which is ahead of the curve in the adoption of digital tools to promote remote work allows them to increasingly serve as “one-stop shops” for organizations seeking nimble, readily scalable business services to keep pace with ever-accelerating change.

Value creation and differentiation are now expected outcomes for GIC, going beyond the traditional roles of purely in-house support functions and outsourcing centers. Increasingly, GICs see themselves as an incubation engine with structured ideation processes that help generate, assess, and pilot new ideas.

These units are offering a wide range of differentiated services leveraging the latest technology, global expertise and best practices. The services they provide range from research and development, product development, digital transformation, analytics to shared services. These are key elements of a modern company’s business strategy.

Mashreq Global Network is a prime example of a GIC evolving with time to cater to the parent organization’s diverse business and operational requirements. First established in India as a global hub for technology solutions to support Mashreq’s customer experience, we have since then set up in Egypt and Pakistan and our purview has expanded to support strategic business groups within the bank.

Like other GICs, our objective is to assist the parent organization with evolving digital finance and the wider digital economy through truly transformational platforms and solutions.

And as automation transforms service operations, human efficiency remains a key factor for parent organizations and GICs. The presence of a concentrated, digitally savvy workforce has become a powerful differentiator among countries, regions and cities vying for its role as a hub for business services. Which is why GICs are often located in countries with strong research and development capabilities, such as the United States, India, parts of Europe, and Asia. And as the talent pool shrinks in these parts, GICs increasingly are looking towards newer destinations.

For example, consider Egypt, an offshoring hub that has rapidly gained recognition over the past two decades. Egypt has numerous competitive advantages as one of the world’s leading locations for digital investment, especially in the field of outsourcing and offshoring. A skilled workforce, favorable investment climate, low cost and excellent geographical location attract GICs like the Mashreq Global Network.

Ranked 15th worldwide by AT Kearney in its 2021 global services location index , and 89th among 132 economies featured in the Global Innovation Index 2022 , Egypt’s prospects are promising. With over half a million Egyptians directly employed in IT, the country boasts a sizable digital talent pool. The World Intellectual Property Organization (WIPO) notes that Egypt produces more innovation outputs relative to its level of innovation investments, further solidifying its standing as a rising GIC hub.

Looking to the future, there are clear expectations for GIC growth around the world, including Egypt. With the advent of AI and other emerging technology, business leaders are motivated to push the boundaries, and this is a key factor driving the scale of these hubs in the next few years. And countries like Egypt are well-positioned to play an integral role in the innovation efforts of companies around the world.

The growing importance of GICs symbolizes the evolving nature of offshoring, which promises to remain a pivotal axis in business success stories around the world. For those of us at the apex of this digital epoch, the world is waiting with bated breath for the innovations these centers will generate that will shape the future of business and the economy alike.