Business Process Outsourcing and “Off-Shoring”: The Globalization of Information-Intensive Services

Abstract

Information-intensive services are being globalized as corporations take advantage of the opportunities made available by the progress of information technology and respond to the challenge of increasing global competition. After analyzing the role that information technology plays in globalizing information-intensive services, the paper reviews a wide range of illustrative examples where information-intensive services have been globalized. Based on this analysis, the paper proposes a theoretical framework that identifies the criteria and guidelines for successfully selecting service activities to be globalized, and presents guidelines to managers for choosing the appropriate country location. By applying this theoretical framework to the U.S. economy the paper provides a rough estimate of the potential impact of globalized information-intensive services on the labor market in the U.S. The paper also analyzes the geographic distribution of language clusters and presents a conjecture concerning the emerging pattern of global trade in information-intensive services. The paper ends with a brief discussion on the opportunity for conducting further research into this growing and important phenomenon.