Trade and FDI: Bearing in mind the limitations to official statistics, they indicate that offshoring of services is quite small, relative to that in manufacturing. It is difficult to combine three separate sources of data to measure the precise extent of offshoring defined in this way. It is therefore about sourcing decisions which involve (a) imports, (b) displacement of domestic production and associated jobs, and sometimes (c) foreign direct investment (FDI) outflows if sourcing happens from overseas affiliates. Definitions: Offshoring happens when private firms or governments decide to import intermediate goods or services from overseas that they had previously obtained domestically. Even with inadequate data, however, this paper provides pointers to answer such questions as: *Why is outsourcing and offshoring happening now? *What is the impact of outsourcing/offshoring on home and host economies? *What policies should be devised to address the causes and consequences of offshoring? The key points raised in this paper are as follows. Our challenge in having an informed debate about offshoring is (a) to articulate the benefits and costs of offshoring by linking the three areas, namely trade and FDI, corporate strategy, and employment and (b) to collect better data – both official statistics and private surveys - that enable us to link micro-level business decisions on outsourcing and offshoring to sectoral and economy-wide outcomes. Third, the impact of outsourcing on jobs and professions is assessed in terms of the repackaging of tasks, skills and knowledge. Second, the paper analyses the causes and consequences of different types of outsourcing seen as strategies for corporate restructuring. First, official statistics on international trade and FDI were examined to gauge the extent of offshoring in services. The paper puts forward a clear definition of offshoring - defined as a combination of trade flows, FDI, and employment shifts - before doing three things. Although offshoring is not a new phenomenon, the current phase of offshoring is marked by the increased tradability of services enabled by ICT.

This paper provides a discussion of key issues which emerged from a review of the debate on offshoring and outsourcing.

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