Offshoring

Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ offshoring. More recently, offshoring has been associated primarily with the sourcing of technical and administrative services supporting domestic and global operations from outside the home country, by means of internal (captive) or external (outsourcing) delivery models.

The term is in use in several distinct but closely related ways. It is sometimes used broadly to include substitution of a service from any foreign source for a service formerly produced internally to the firm. In other cases, only imported services from subsidiaries or other closely related suppliers are included. A further complication is that intermediate goods, such as partially completed computers, are not consistently included in the scope of the term.

Offshoring can be seen in the context of either production offshoring or services offshoring. After its accession to the World Trade Organization (WTO) in 2001, the People's Republic of China emerged as a prominent destination for production offshoring. Another focus area has been the software industry as part of Global Software Development and developing Global Information Systems. After technical progress in telecommunications improved the possibilities of trade in services, India became a country leading in this domain though many parts of the world are now emerging as offshore destinations.

The economic logic is to reduce costs. If some people can use some of their skills more cheaply than others, those people have the comparative advantage. The idea is that countries should freely trade the items that cost the least for them to produce.

Read more about Offshoring:  Frequently Used Terms, Focus and Strategy in Offshoring, Transfer of Intellectual Property, Debate, Effects of Factor of Production Mobility, History

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Offshoring Research Network - Surveys, Case Studies, and Services
... It tracks strategic drivers and risks of offshoring, location choices, delivery models, performance outcomes and future plans of U.S.-based, European and other companies ... Respondents include companies that currently engage in offshoring, that are considering offshoring and that have not yet considered offshoring Data is collected at multiple levels firm level (f ...
Offshore Development Center
... Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing ... Even state governments employ offshoring ... More recently, offshoring has been associated primarily with the sourcing of technical and administrative services supporting domestic and global operations from outside the home country, by means of internal (c ...
Offshoring - History
... This offshoring and closing of factories has caused a structural change in the developed world from an industrial to a post-industrial service society ... crossed with great disparities on pay rates made increased offshoring from wealthier countries to less wealthy countries financially feasible for many companies ... low corporate tax rates, US companies began offshoring of software, electronic, and pharmaceutical intellectual property to Ireland for export ...
Economic Results Of Migration - Offshoring and Outsourcing
... Offshoring Big companies trying to reduce costs relocate their business processes partly or entirely to the countries where costs of operation are lower and low-paid labour is available ... Recently the main countries of destination for production offshoring is China and India ...
Offshore Development Center - History
... This offshoring and closing of factories has caused a structural change in the developed world from an industrial to a post-industrial service society ... with great disparities on pay rates made increased offshoring from wealthier countries to less wealthy countries financially feasible for many companies ... Because of Ireland's relatively low corporate tax rates, US companies began offshoring of software, electronic, and pharmaceutical intellectual property to Ireland for export ...