Offshoring and Outsourcing as New Challenges for Industry in the EU

Abstract

The aim of this paper is to show the impact of offshoring and outsourcing on the industrial structures of the EU Member States’ economies. This chapter adds value to the existing research in three areas. Firstly, it shows the development of offshoring and outsourcing in the EU in the years 1995–2011. Secondly, it shows changes in the industrial structure of the EU in the same period. And, thirdly, it indicates the impact of offshoring and outsourcing on the changes in industrial structure of the EU economies. Our analysis shows that in the years 1995–2011 there was a significant increase in the share of trade in intermediate goods exports and imports in all 28 EU Member States. These trends were also visible when analyzing international trade in value added. In 1995–2011 the domestic value added share of gross exports in EU-28 fell, while the foreign value added share of gross exports increased. In the analyzed period we could observe not only the growing importance of offshoring in general, but also the growing importance of service industries in both national economies and in the international production fragmentation.