Off-Shoring: An Elusive Phenomenon

January 2006 - This is the first of several reports by an Academy Panel formed to assess off-shoring, including the adequacy of current data and their usefulness in ascertaining its extent and economic effects.

Off-shoring business operations is a difficult, elusive and exceedingly complex phenomenon. It produces myriad and widespread economic impacts, with U.S. employment and workers’ earnings being among the most sensitive. Concerns about off-shoring are not new. For decades they have been central to the debate over the benefits and costs of economic growth and trade expansion.

Key Findings

The Panel finds that the use of multiple terms to describe off-shoring has hindered a meaningful understanding of this phenomenon. It recommends simplifying the discussion by focusing on three basic terms: “outsourcing,” “off-shoring” and “off-shore outsourcing.” It also recommends a broad definition for off-shoring to avoid the pitfalls of narrow definitions that create ambiguity over particular activities stemming from artificial distinctions or changes over time.