The Koreans became world beaters because a handful of entrepreneurs received government backing in the form of cheap finance and monopoly concessions. Their know-how increased as they became more internationally competitive, until the manufacturing economy was whittled down to the handful of world-beating firms we see today.
The book was fresh in my mind when I read about the latest plans of Andy Penn, the chief executive of the former Australian telecommunications monopoly Telstra. The jury is still out on its effectiveness, with its share price less than half of what it was three years ago. The company is midway through a painful process to axe jobs, but an announcement last week showed how it is giving up on Australian know-how, and on developing local skills.
Penn has staked the future on developing new products and services to replace the disappearing fixed-line revenue, but it appears that innovation will increasingly happen offshore. But he also cast a searing indictment on our education system, which is failing badly to connect young Australians with the opportunities of the 21st century economy. Both refer to out-of-country but relatively nearby locations. Nearshoring is having business processes , especially information technology processes, in a nearby country, often sharing a border with the target country.
Cultural alignment with the business is often more readily achieved through near-sourcing due to there being similarities between the cultures in which the business is located and in which services are sub-contracted, including for example proficiency with the language used in that culture. Communication on business projects between management and the project team is often of particular concern. Constraints imposed by time zones can make communication a labor intense process, so near-sourcing provides a solution for facilitating the communication process through eliminating or reducing time zone constraints.
Proximity also facilitates communication by allowing various actors within the business to meet on a regular basis when required. Traveling from the United States to Canada only takes a few hours depending on the location, but traveling to China or Europe often entails a much longer flight time. Nearshoring is a derivative of the business term offshoring.
Software development nearshoring is mainly due to available low cost skilled developers.
Many nearshore providers attempted to circumvent communication and project management barriers by developing new ways to align organizations. As a result, concepts such as remote insourcing were created to give clients more control in managing their own projects. Nearshoring still hasn't overcome all barriers, but proximity allows more flexibility to align organizations. Collaboration by universities, industry, and government has slowly produced improvements.
The United States has a special visa , the H-1B ,  which enables American companies to temporarily up to three years, or by extension, six hire foreign workers to supplement their employees or replace those holding existing positions. In hearings on this matter, a United States senator called these "their outsourcing visa. Similarly, members of the Direct Mail Marketing Association were the "outsourcers" for advertising agencies and others doing mailings.
DMMA celebrated their th anniversary in The term "outsourcing" became very common in the print and mail business during the s, and later expanded to be very broad and inclusive of most any process by the year Today, there are web based print to mail solutions for small to mid-size companies which allow the user to send one to thousands of documents into the mail stream, directly from a desktop or web interface. The term outsource marketing has been used in Britain to mean the outsourcing of the marketing function.
While much of this work is the "bread and butter" of specialized departments within advertising agencies, sometimes specialist are used, such as when the Guardian newspaper outsourced most of their marketing design in May Business process outsourcing BPO is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider.
Originally, this was associated with manufacturing firms, such as Coca-Cola that outsourced large segments of its supply chain. BPO is typically categorized into back office and front office outsourcing. BPO can be offshore outsourcing or to a neighbouring or nearby country: nearsourcing nearshore outsourcing. Although BPO began as a cost-reducer, changes specifically the move to more service-based rather than product-based contracts , companies now choose to outsource their back-office increasingly for time flexibility and direct quality control.
BPO vendor charges are project-based or fee-for-service, using business models such as Remote In-Sourcing or similar software development and outsourcing models. BPO also permits focusing on a company's core competencies. Supply chain management with effective use of supply chain partners and business process outsourcing can increase the speed of several business processes.
Even various contractual compensation strategies may leave the company as having a new "single point of failure" where even an after the fact payment is not enough to offset "complete failure of the customer's business". The latter is called lock-in ; flexibility may be lost due to penalty clauses and other contract terms. Security risks can arise regarding both from physical communication and from a privacy perspective.
Employee attitude may change, and the company risks losing independence. Risks and threats of outsourcing must therefore be managed, to achieve any benefits. In order to manage outsourcing in a structured way, maximising positive outcome, minimising risks and avoiding any threats, a business continuity management BCM model is set up. BCM consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced. Analytical hierarchy process AHP is a framework of BPO focused on identifying potential outsourceable information systems.
Willcocks, M. Lacity and G. Fitzgerald identify several contracting problems companies face, ranging from unclear contract formatting, to a lack of understanding of technical IT processes. Industry analysts have identified robotic process automation RPA software and in particular the enhanced self-guided RPAAI based on artificial intelligence as a potential threat to the industry   and speculate as to the likely long term impact.
With the average length of a BPO contract being 5 years or more  — and many contracts being longer — this hypothesis will take some time to play out. On the other hand, an academic study  by the London School of Economics was at pains to counter the so-called "myth" that RPA will bring back many jobs from offshore. One possible argument behind such an assertion is that new technology provides new opportunities for increased quality, reliability, scalability and cost control, thus enabling BPO providers to increasingly compete on an outcomes-based model rather than competing on cost alone.
With the core offering potentially changing from a "lift and shift" approach based on fixed costs to a more qualitative, service based and outcomes-based model, there is perhaps a new opportunity to grow the BPO industry with a new offering. India, China and the Philippines are major powerhouses in the industry. From Wikipedia, the free encyclopedia. Not to be confused with Offshoring. Main article: Globalization.
New Technology Brings Offshoring to Villages
See also: Disney litigation. Main article: H-1B visa.
- From around the site.
- Tower of Babel: The evidence against the new creationism.
- NAE Website - Offshoring and the Future of U.S. Engineering: An Overview.
- Warrior Nation: Images of War in British Popular Culture, 1850-2000.
- Logical Reasoning with Diagrams (Studies in Logic and Computation).
International Journal of Production Economics. CTI Reviews. The Concept" PDF. Retrieved June 28, Print What's This India Business?
The Offshoring of Innovation
London: Nicholas Brealey International, The New York Times. October 19, CIO magazine. Mankiw; P. Swagel Macmillan English Dictionary. International trade.
The Offshoring of Innovation | Economic Policy Institute
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This project aims to shed light on these blind spots by answering some of the most fundamental questions in innovation offshoring research on SMEs in three steps: Drawing a thematic map of current innovation offshoring research and identifying the research gaps that form the start of the empirical study Developing new SME-specific hypotheses to account for the particularities of those SMEs that internationalize their innovative activities.
This is done through qualitative interviews and a large-scale expert panel in order to achieve fresh insights Validating these original hypotheses using a large-scale, two-country, quantitative survey targeting Austrian and British SMEs To account for the wide scope of the exploratory research questions, this study is designed to follow a sequential mixed-method approach with methods tailored to each phase. The contributions of the project are as follows: For science, it provides a first comprehensive picture of existing research on innovation offshoring in general and innovation offshoring by SMEs specifically.
This not only highlights the various streams of research, but also points out future directions to help develop the field of international entrepreneurship and international business.
Related Innovation in India: The Future of Offshoring
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