Offshoring refers to the practice undertaken by companies of migrating activities to offshore locations outside their countries of origin. Companies, mainly in western economies, have historically adopted an offshore strategy predominantly for manufacturing work and blue-collar jobs. Only recently, thanks to the substantial progress in information and communication technologies, a novel type of offshoring has emerged.
In fact, companies now have the potential to relocate a number of business processes (e.g., call-center customer support, transaction processing and data management) that until only a few decades ago were considered classic white-collar jobs to be performed exclusively at home. Even though this new kind of offshoring can still be considered a recent phenomenon, as the proportion of actual versus potential offshored business processes remains small, its forecasted future impact on the global realignment of jobs urges us to investigate it thoroughly.
Offshoring is closely related to another well-known business practice: outsourcing. Yet, whereas the latter only refers to activities or functions being carried out exclusively by third party providers, offshoring processes can involve a third party at times or a subsidiary company on some other cases. Outsourcing mainly relates to those non-core business activities which are usually managed by more specialized and larger companies.