Offshoring

Offshoring (also known as international fragmentation and vertical specialization) can be defined as the relocation of business processes to a different country in order to reduce the average cost curve of a business. Offshoring can be seen in different stages of the production process, either in production of a good or decision making. As a result of advancement in Information technology, previously non tradable services have now become tradable or are expected to do so. The business practice of offshoring focuses on the relocation of labor-intensive service industry functions to locations remote to the business center, such as India, Ireland or the Philippines.