Offshoring

Definition

Offshoring is the practice of relocating business processes or production from one country to another, often to leverage cost benefits. It is a strategy used by companies seeking to reduce expenses and increase efficiency by taking advantage of the lower labor costs or favorable economic conditions in other countries.

Related terms

Globalization:

The process by which businesses or other organizations develop international influence or start operating on an international scale.

Outsourcing: The practice of hiring third parties to conduct services previously performed in-house, often internationally, to cut costs.

Comparative Advantage:

An economic principle that posits countries should produce goods and services where they have a lower opportunity cost compared to others, leading to more efficient global production