The scale and characteristics of services offshoring in the visegrád countries

Abstract

Objective: The paper aims to outline the current position of V4’s as destinations for services offshoring activities, analyse the extent and patterns of service exports and service-based FDI, and to determine their potential as offshoring locations. Research Design & Methods: The paper is divided into six sections. Following the introduction, the 2nd section provides the theoretical background and gives an overview of the definitions of services offshoring. The 3rd and 4th sections examine trade data in order to find evidence of enhanced offshoring-related service activities in V4’s. The 5th section studies the current and future position in the global services offshoring market of the CEECs. The final section contains research conclusions. Findings: In the last few years, the CEECs have become an important location for services offshoring; there has been significant growth in the participation of this region in the global services offshoring market. Trade statistics confirm the assumption that expanding export in other business services and ICT services was associated with the growing importance of the V4 countries as offshoring locations. Implications & Recommendations: Service offshoring is already a large and fastgrowing industry in V4’s, and there are emerging opportunities for extending it even further, individually and as a group, building on their past successes in exports. The main threats that V4’s face are related to other CEECs that will seek to penetrate further into the nearby Western European market. Contribution & Value Added: The results will contribute to the increase of knowledge of the society about one of the most crucial processes in the contemporary global economy. It is expected that offshoring will spread, embracing new and more advanced business processes. Hence, this phenomenon demands further analyses.