Globalization and offshoring of software (original) (raw)

The Emerging Offshore Software Industries and the United States Economy

Brookings Trade Forum, 2005

The possibility that a significant number of skill-intensive service jobs might move from the United States to developing countries has generated widespread recent concern. The newness of the phenomenon has led to rampant speculation, by academics, in the press, and on Wall Street, of the potential scope of such "offshoring" and its likely impact on the U.S. economy. 1 Drawing from Arora and Gambardella (2004 and 2005), this paper attempts to shed some light on the development of offshoring by focusing on one of the first skill-intensive industries to move to low-wage economies, namely software. The paper proceeds in four parts. The first section provides an overview of the global software industry. Section two discusses how three emerging-market countries, India, Ireland, and Israel (the 3 Is) separately developed dynamic software industries that in 2001 together accounted for more than $15 billion in exports. Section three examines the impact of this offshoring on the U.S. economy. It also addresses future prospects for offshoring software R&D, concluding that this is unlikely. Finally, section four compares the software industry's experience to that of other skill-intensive industries. 1 "Offshoring" in this paper refers to offshore outsourcing, or the moving of functions previously performed in the same country as the product market to an arms-length contractor operating outside the nation's borders. "Outsourcing" refers to moving functions previously performed in-house to an armslength contractor, whether or not the same contractor is located in the same country or even on-site.

Domestic and International Offshoring of Tasks

2011

This paper presents descriptive evidence suggesting that there may be something to be learned about the future patterns of international offshoring from the recent patterns of "domestic offshoring", the relocation of activities across regions within countries. Industries appear to offshore activities first within the same country and only later across the national border. Investigating the domestic and international offshoring patterns for West German manufacturing industries between 1992 and 2007, we find that, on the one hand, industries that offshored more extensively domestically offshored less extensively internationally, and vice versa. On the other hand, we find that those industries that offshored more extensively domestically were still in earlier stages of their life cycles while those that offshored more extensively internationally were already in later stages. International unbundling may consequently not be as unpredictable as it is currently believed to be.

Globalization And Its Influence On Offshoring

2016

Changes in competition which are being observed, constitute both the result and the condition of globalisation. The structure and degree of strictness of competitive fight among global corporations, directly influence the international development strategies of enterprises. Competition on a global scale creates new systems of connections, as well as a new method of assessment of the quality of technological progress and of obtaining competitive advantage. It extorts, so to speak, the creation of new models of organising, different ways of coordinating and configuring activities and cooperating with the environment. An important solution that leads to an increase in functional efficiency for an enterprise is an offshoring. It is the latest concept, which means the transfer of chosen processes and enterprise functions beyond the borders of the native country. The purpose of this article is to make the reader familiar with the concept of offshoring as the latest trend inherent to the p...

Outsourcing and offshoring

2004

The recent overseas outsourcing of a number of business services, such as call centres and accounts processing, has raised concerns about the future of an area of business activity in which the UK has been deemed to hold a competitive advantage. While the future direction of UK manufacturing may have been questionable, the abundance of skilled service workers has long been thought to provide the basis for a strong alternative range of businesses. But ICT developments have reduced the dependence of many tasks from any particular location and made possible the relocation of many service jobs from industrialized to developing countries that provide a suitable infrastructure, high skills labour market and labour cost benefits. The great majority of work which is being offshored is in information technology (IT) and business process or call centre work (BPO). The providers of IT/BPO services include UK specialists, multinationals, and an emerging group of Indian companies. Interestingly,...