Off shoring

Off shoring describes the relocation by a company of a business process from one country to another -- typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ off shoring. The idea is that countries should freely trade the items that cost the least for them to produce.

The term is in use in several distinct but closely related ways. It is sometimes used broadly to include substitution of a service from any foreign source for a service formerly produced internally to the firm. In other cases, only imported services from subsidiaries or other closely related suppliers are included.

A further complication is that intermediate goods, such as partially completed computers, are not consistently included in the scope of the term. Off shoring can be seen in the context of either production off shoring or services off shoring. If some people can use those people have the comparative advantage. 

After its accession to the World Trade Organization the People's Republic of China emerged as a prominent destination for production off shoring. After technical progress in telecommunications improved the possibilities of trade in services, India became a country leading in this domain emerging as offshore destinations.