Offshoring
It’s the relocation of a business process from one country to another - typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state governments may also employ offshoring. More recently, technical and administrative services have been offshored. Imported services from subsidiaries or other closely related suppliers are included, whereas intermediate goods, such as partially completed cars or computers, may not be.
Lower cost and increased corporate profitability are often the motivation. More recently, offshoring incentives also include access to qualified personnel abroad, in particular in technical professions, and decreasing the time to market.
Jobs are added in the destination country providing the goods or services and are subtracted from the higher-cost labor country. The increased safety net costs of the unemployed may be absorbed by the government in the high-cost country or by the company doing the offshoring.
After its accession to the World Trade Organization 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 one prominent destination for such offshoring, though many parts of the world are now emerging as offshore destinations.
Zuckerman, M. A. (2008). The Offshoring of American Government.
Manning, S., Massini, S., & Lewin, A. (2008). SSRN-A Dynamic Perspective on Next-Generation Offshoring: The Global Sourcing of Science and Engineering Talent. Academy of Management Perspectives.
Christian, C. F., Kurpjuweit, S., & Wagner, S. M. (2017). The impact of additive manufacturing on supply chains. International Journal of Physical Distribution & Logistics Management.