Off-Shoring And Outsourcing

Abstract

<p class="MsoTitle" style="text-align: justify; line-height: normal; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-family: Times New Roman;"><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">Because of a dramatic decrease in transportation and telecommunication costs, the digital revolution, and the forces of globalization, off-shoring has accelerated in the past few years.<span style="mso-spacerun: yes;">  </span>While there is little doubt that off-shoring has brought hardship to thousands of workers and communities, there is also little doubt that it has benefited many worker and communities.<span style="mso-spacerun: yes;">  </span>Today, off-shoring continues to generate considerable debate on the long-run impact. Also, there is considerable misunderstanding about this phenomenon.<span style="mso-spacerun: yes;">  </span>In this paper, the authors make a distinction among the </span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1; mso-bidi-font-weight: bold;">terms <span style="mso-bidi-font-style: italic;">outsourcing, offshore outsourcing, and off-shoring</span>.<span style="mso-spacerun: yes;">  </span></span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">Off-shoring has been facilitated by a deconstruction of the value chain, allowing firms to evaluate all activities as potential candidates for being performed outside the firm.<span style="mso-spacerun: yes;">  </span>Reasons </span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1; mso-bidi-font-weight: bold;">for the acceleration of off-shoring are outlined.<span style="mso-spacerun: yes;">  </span>An explanation of why off-shoring is not a villain for the developed economies is also provided</span><span style="color: black; font-size: 10pt; font-weight: normal; mso-themecolor: text1;">.</span></span></p>