Offshoring, the process of moving business functions to another country (either keeping them in-house or using a third-party vendor), is often seen as necessary for large and midsize U.S. corporations to compete in the global marketplace today. Competitive pressure upon operating costs and product-to-market release times have forced thousands of companies to look for cheaper labor pools in countries such as India, China, and Russia.
Once primarily associated with manufacturing, offshoring now affects a variety of industries and functions. Booz Allen Hamilton, a global strategy and technology consulting firm, reports that engineering, design, and research are increasingly being performed outside companies’ home countries. Driven by the growing demand for more complicated consumer and industrial products and a shortage of skilled high-tech workers in the West, the offshoring of these services is expected to continue at a rapid pace.
