What are the trends in outsourcing, offshoring and offshore outsourcing?
Outsourcing and offshoring have been around for a long time and they are here to stay. Outsourcing has increased in the last two decades for various reasons, including companies being encouraged to focus on their “core competence,” the increasing technological complexity of products and service offerings (making it difficult for one firm to be the best at everything) and technological advances that have made the management across organizational boundaries easier. Offshoring has also been increasing for many years, due to liberalization of trade policies, ease and costlessness of information transmission due to the Internet as well as the improvement of capabilities and infrastructure in many low-cost countries. High shipping costs due to oil prices in 2008, a spate of quality recalls since 2007, issues with intellectual property, rising costs in China and other destinations as well as a feared loss of innovation capability have all caused some rethinking of offshoring. Even GE’s CEO ha
