eWork and Regional Development: eWork Relocation

Concentration and outsourcing

This type of relocation stems from company reorganisation and leads to the geographical concentration of functions resulting from outsourcing to another company. It is thus first and foremost a question of another company carrying out given tasks, so that the actual destination location of the activity is only a secondary issue. However, there is not necessarily a clear-cut dividing line here. The features of the region, within which the company to which the task is outsourced is located, may indirectly play a role in supporting the competitive advantages of the company; for example, access to specialised and/or low cost labour which is a reflection of the regional labour market.

In some cases, the company to which work is outsourced may be wholly or partly owned by the same company that is outsourcing the work. If it is a question of the restructuring of a group, as is the case here, then work is very often outsourced to specialised units within the group.

Large companies also frequently outsource particular functions to specialist companies that do not belong to the company or its particular area of influence. The aim of this is to gain access to specialised expertise and/or to concentrate on the company’s core competencies. In contrast to other cases of outsourcing, this type is characterised by geographical concentration in the course of company reorganisation. It is not a question of additional tasks that are outsourced, but a reduction in the spectrum of internal activity - and of jobs. Typical functions in which eWork is relocated in this way include ICT, customer services, accounts and marketing.

(Source: Flecker and Kirschenhofer, 2002)

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

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