Outsourcing and Offshoring

Outsourcing means contracting work to another company; offshoring means moving work to another country, whether to a foreign subsidiary or a contractor. From the 1980s, manufacturing tasks moved from rich countries to lower-wage economies, and from the late 1990s, cheaper telecommunications allowed services such as software development, customer call centers and accounting to follow, especially to India and the Philippines. Firms gained lower costs, round-the-clock work and access to skilled workers, while host countries gained jobs and export earnings.

Economist Alan Blinder estimated in 2007 that roughly a quarter of US jobs could potentially be performed abroad, though potential is not the same as actual movement. Workers in affected occupations faced pressure on jobs and wages. Recently, concerns about supply risks, rising wages in Asia, automation and geopolitics have encouraged some 'reshoring' and 'nearshoring', moving work home or to nearby countries, though the scale of this shift remains debated.