International Outsourcing

International outsourcing refers to the procurement of inputs from independent suppliers and across national borders. It is alternatively referred to as offshore or global outsourcing. International outsourcing has been on the rise since at least the 1980s. Where it initially mostly concerned manufacturing, recently more emphasis in practice and in the literature has gone towards international outsourcing of services including business processes, as well as more advanced knowledge processes such as research and development and design. In manufacturing, international outsourcing can be of components, sub-assemblies or even entire products, such as Apple’s wholesale subcontracting of iPhone manufacturing to China. International outsourcing of service activities often involves delegation of a process and/or function of the firm to a service provider, as in the case of ABN-AMRO outsourcing its IT services to IBM. International outsourcing is in some cases part of a deliberate strategy to develop a global supply chain.