Title: The offshore services value chain: upgrading trajectories in developing countries

Authors: Karina Fernandez-Stark, Penny Bamber, Gary Gereffi

Addresses: Center on Globalization, Governance & Competitiveness, Duke University, 2024 W. Main St., Durham, NC 27705, USA. ' Almirante Byrd 2094, Providencia, Santiago, Chile. ' Department of Sociology, Duke University, Durham, NC 27708-0088, USA

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.

Keywords: global services; outsourcing; knowledge economy; information technology; IT; business process outsourcing; BPO; knowledge process outsourcing; KPO; offshore services; global value chain; GVCs; upgrading; developing countries; India; human capital; formal education; demand-driven training; compliance.

DOI: 10.1504/IJTLID.2011.041905

International Journal of Technological Learning, Innovation and Development, 2011 Vol.4 No.1/2/3, pp.206 - 234

Published online: 31 Jan 2015 *

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