What term refers to the process of outsourcing production or services to countries with lower labour costs?

Key Points

• Offshoring refers to the practice of relocating business processes or production to another country, typically to leverage cost advantages.
• This process is often used to reduce labor costs, as labor in countries such as China, India, and the Philippines can be significantly cheaper than in developed nations.
• Offshoring can involve various business functions, including manufacturing, IT services, customer service, and more.
• It is a common strategy among companies looking to maintain competitive pricing, improve efficiency, and expand their global footprint.

Additional Information

• Localisation
  • Localisation refers to the adaptation of a product, service, or content to meet the linguistic, cultural, and regulatory requirements of a specific target market or region.
  • This process involves modifying various elements such as language, design, and functionality to ensure relevance and acceptance in the local context.
• Protectionism
  • Protectionism is an economic policy of restricting imports from other countries through methods such as tariffs, import quotas, and government regulations.
  • The goal is to protect domestic industries from foreign competition and preserve jobs within the country.
• Import substitution
  • Import substitution is an economic policy that advocates for replacing foreign imports with domestic production.
  • The aim is to reduce dependence on foreign goods, foster local industry, and promote self-sufficiency.