eWork and Regional Development: eWork Relocation

One-off expansive relocation

In cases of one-off expansion, the background for relocation is the concrete needs of specific units within the company, rather than a re-organisation of the whole company or group. For example, the company’s ICT department or call centre may come up against capacity limits at its present location and considers outsourcing projects as a solution to the problem. Another reason could be an isolated requirement for eWork, for example in software development, which can be defined as a project and which justifies outsourcing in view of the amount of work involved. In the type of relocation described here as a one-off measure, the outsourced activities complement those at the original location. Existing jobs are not moved or replaced. Rather, new jobs are created at another location. Often, it would not be possible to carry out the work at all without relocation.

Where focus from the start is on a particular company which can cope with this extra work, regardless of the region in which it is located, the relocation type is one-off expansionary relocation through outsourcing. Where attention is directed instead, as here, at least in the first instance, at favourable regions within which to find companies to undertake the work, the nature of the target region clearly plays a very important role in the decision making process. In such relocations, decisions may be based on a wide range of management motives, for example:

the need to overcome capacity bottlenecks in the company, but where expansion at the existing site is problematic because the company cannot get the necessary personnel.
expansion is needed, but the costs involved at the existing location are too high.
individual managers or employees of the company would like to live in a different region and are able to realise this wish because they can also open up a market there for the company.
public institutions expand their range of services for peripheral regions and establish jobs there.

(Source: Flecker and Kirschenhofer, 2002)

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

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