eWork and Regional Development: eWork Relocation

One-off expansionary relocation through outsourcing

In this type or relocation, organisations decide to outsource particular activities to other companies on grounds of capacity, expertise, costs or even image. In contrast to one-off expansive relocation, the intention here is not to relocate to a particular region, but to choose a company that offers the appropriate service. The decision to outsource, however, results in the work ultimately being carried out in another region or another country. To some companies it does not matter where the work thereby migrates; some do not even know with any certainty where it is being carried out.

Often important in this type of relocation are the transnational, and division of labour, structures of many companies that offer outsourced services. As illustrated by the company-reorganisation types of relocation, service providers may exploit cost differences and an international division of labour in order to make competitive bids. But in this type of relocation, the networking of independent small and medium-sized companies in various countries and regions, and the activities of brokers who offer project contracts and outsourcing services over the Internet, can be important. Even when one-off measures are involved, as here, such relocation cases can be typified by a complex structure of relationships.

As in most attempts to categorise economic activities, distinctions between different types of relocations are not always clear cut. This type of relocation through outsourcing might start as expansionary (ie by creating new jobs without destroying existing jobs), but may later, perhaps unintentionally, change into a replacement relocation which does destroy the original jobs. Thus this relocation type could become one-off replacement relocation through outsourcing.

(Source: Flecker and Kirschenhofer, 2002)

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

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