The Offshoring of High-Value Services and the Globalization of Capability Sourcing

Offshoring used to be synonymous with the pursuit of a low-cost strategy. In traditional or ¿first-generation¿ business process offshoring, firms would ship highly standardized or highly repetitive low-skill business processes to workers in countries with significantly lower labour costs. As such, any labour-intensive tasks that could be codified and transmitted over long distances were candidates for the offshorer¿s axe, in firms faced with increasing cost pressures in their home markets. However, recent surveys repeatedly show that there are significant changes going on regarding why and how firms offshore services.