eWork and Regional Development: eWork Relocation

Relocation in the group during decentralisation

This type of relocation is characterised by an extension of the company’s activities, for which a location different from the company’s headquarters or main activities is chosen. Even if it were possible in principle to base the new workplaces at the same location or locations, reasons of cost or availability of labour mean that another region or another country is preferred. In contrast to other types of delocalisation, the aim here is not to cut jobs in the course of relocation. It is rather a case of creating new jobs at a different location.

Expansion into another region can also be a good way of guaranteeing or even increasing jobs, within the company. This is the case if, for example, the competitiveness and total turnover of the company rises as a result of a cost-oriented relocation, so that employment at the original location could also benefit. Geographical relocation is a primary objective in this case; regional aspects are thus explicitly addressed during decision-making.

Often, the initial relocation consists of the setting up of an enterprise in another region or another country. This, as a rule, is a visible step that the top company management will decide upon. The specific relocation of work, on the other hand, often takes place on a project basis. This means that the total amount of work relocated depends on several or many separate decisions at decentralised levels. Alongside the central decision, such a delocalisation thus requires an incentive inside the organisation actually to utilise the advantages of the destination region.

This type of relocation can also be observed in the public sector, for example as the result of a specific policy to redress regional unemployment. In one case, a change in the law in a Nordic country led to the creation of an additional task of customer advice concerning pension insurance. Two call centres were set up for this, with their locations being chosen, amongst other things, according to a labour market analysis. One of these was in an area that had recently suffered job losses in the public sector, and to which the government had promised compensation.

(Source: Flecker and Kirschenhofer, 2002)

Examples (names and distinguishing details have been changed to ensure anonymity)

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