Offshoring in Europe—Evidence of a Two-Way Street from Denmark

Based on a large Danish survey of companies in tradable goods and services sectors, this working paper presents the results of offshoring and its impact on jobs, adding new perspectives to the globalization debate. Globalization entails a cross-border flow of jobs, but contrary to the mainstream media portrayal of globalization, it is not a one-way but a two-way street. In 2002–05 more jobs were created as a result of offshoring of activities into eastern Denmark from companies outside Denmark (i.e., inshored to Denmark) than were eliminated due to offshoring from companies in the Danish region. Overall, the employment effects of both offshoring and inshoring were found to be limited to less than 1 percent of all jobs either lost to offshoring or gained via inshoring. For Denmark, the worries in purely numerical terms regarding the employment effects of globalization seem overly alarmist. However, the trends revealed in the study do pose challenges for low-skilled workers—the group most negatively affected—and for highly skilled specialists, who face pressure to constantly upgrade their skills. Policy implications can be drawn in view of our results to ensure that labor markets are able to meet the demands of globalizing firms.Labor Market, Offshoring, Offshore Outsourcing, High- and Low-Skilled Workers, Skill Bias, Denmark, Flexicurity

Process Models and Advanced Services Offshoring to India

This paper addresses a recent strand of offshoring research that concerns the processes of evolution and change that appear in offshoring partnerships after the launch of offshoring operations. Based on longitudinal case studies of offshoring of advanced IT and engineering services from Danish firms to Indian firms, I identify a process model with three stages that captures the evolution of the initial 1-2 years of the offshoring partnership. Overall, the data portray a rapid development of the Danish-Indian offshoring partnerships which show that once trust is established and offshoring firms gain experience, the offshoring firms will increase the sophistication as well as expand the range and volume of advanced work done offshore. The dynamics of the process therefore suggest that at a broader scale, advanced services offshoring will increase in the coming years

A Strategic Management Analysis on Activity‐level

In this exploratory study we look at human asset aspects of offshore outsourcing of services that over time become more advanced and strategic potent to the outsourcing firms. As a consequence, the outsourcing firms might want to internalize the operations. We focus on the ways that outsourcing firms may transfer key personnel of local service providers to whollyowned subsidiaries. We argue that a felt need for applying more powerful incentives on key personnel of the service provider ‐ to harness and empower the sourcing operation ‐ may in itself be a motive for, and key driver of, the internalization process

The Impact of Clients and Service Types in Service Offshore Outsourcing

In this paper we study whether and how the interaction between clients and the service providers contributes to the development of capabilities in service provider firms. In situations where such a contribution occurs, we analyze how different types of activities in the production process of the services, such as sequential or reciprocal task activities, influence the development of different types of capabilities. We study five cases of offshore-outsourced knowledge-intensive business services that are distinguished according to their reciprocal or sequential task activities in their production process. We find that clients influence the development of human capital capabilities and management capabilities in reciprocally produced services. While in sequential produced services clients influence the development of organizational capital capabilities and management capital capabilities

A learning perspective on the offshoring of advanced services

Based on longitudinal case studies of offshoring of advanced IT and engineering services from Danish firms to Indian firms, this paper explores organizational learning that occurs over time in both home and host firms and uses learning as a measure of the firm impact of advanced services offshoring. The findings are consistent with the theoretical view that advanced services offshoring must be understood as an antecedent for strategic business development and organizational change in both home and host firms. The study shows that when offshoring partnerships mature and firms gain experience, learning in both home and host firms evolves over time and differs in many cases from their initial objectives and expectations. In some of the Danish firms engaging in offshoring even ignites a process of strategic transformation. Both Danish and Indian firms use the input from their offshoring partnership to upgrade their organizations and business processes.Services offshoring Global integration Organizational learning Knowledge transfer Business strategy