The offshore services value chain: upgrading trajectories in developing countries

Abstract

This article analyses the offshore services industry using the global value chain approach. This industry has grown at a rapid pace over the last decade, driven principally by the search of businesses to reduce costs by unbundling and offshoring corporate services. This paper explores how developing nations have seized these growth opportunities. While developed countries consume the vast majority of global services, demand from developing economies and new end markets is beginning to grow. Supply is dominated by India, which in 2009 had 45% of the global market share for offshore services. Indian firms occupy most value chain segments and they have expanded in the South to serve both domestic and export markets. Although the quality and quantity of human capital remains the key factor in the location of offshore services, formal education is being supplemented by demand-driven training and compliance with required international professional certifications and performance standards.

Gender and COVID‐19: Workers in global value chains

“…The BPO industry is highly concentrated and dominated by large information technology (IT) firms that are headquartered in developed countries, along with some mature firms in India that provide services to customers through a network of delivery centres in low-cost developing countries (Gereffi and Fernandez-Stark 2010). At the low-value end of the BPO chain, routine services that are easily codified and transferable predominate, though higher-value-added services, such as human resources, require more coordination between the buyer and the seller (Fernandez-Stark, Bamber and Gereffi 2011).…”

Effets du COVID‐19 sur les travailleurs des chaînes de valeur mondiales: une analyse de genre

“…Il est dominé par de grandes entreprises de services numériques des pays développés, ainsi que par quelques entreprises indiennes matures qui fournissent des services aux clients en s'appuyant sur un réseau de prestataires dans des pays en développement à bas coût (Gereffi et Fernandez-Stark, 2010). À l'extrémité inférieure de la chaîne de valeur des services externalisés prédominent des tâches routinières faciles à codifier et à transférer, alors que les services à forte valeur ajoutée tels que la gestion des ressources humaines nécessitent davantage de coordination entre le client et le fournisseur (Fernandez-Stark, Bamber et Gereffi, 2011).…”

Internationalization strategies of emerging market-based multinationals: integration of Indian ICT-ITES companies on the Dutch service outsourcing market

“…This also has implications on how we should evaluate the international dynamics in the ICT-ITES sector. Whereas the sector is frequently associated with the relocation of activities to lower cost locations, with subsequent fears for job loss (Blinder, 2006;Fernandez-Stark et al, 2011;UNCTAD, 2012), it stimulates a counter-process in which service providers are stimulated to locate near (Western) customers and be present in the main economic centres in the world.…”

“…The literature on the ICT-ITES sector is largely focused on the relocation of service work to the global South through offshore outsourcing arrangements (Dossani & Kenney, 2009;Fernandez-Stark et al, 2011). Indian ICT-ITES firms seeking increasing local presence in the main economic centres of the world to serve customers indicates that they are no longer only recipients of service offshoring to India, but that they are now shaping the international contours of the ICT-ITES sector (Hattari & Rajan, 2010;Hermelin et al, 2011).…”