Make or buy : offshoring of services functions in manufacturing

Published: 7 Nov 2019

About 40% of employment in manufacturing is in services functions. This paper examines how employment in services function in manufacturing is affected by offshoring. It finds that the impact is small on average but depends strongly on the complexity of the value chain, the policy environment and ICT maturity. Manufacturing employment is more services intensive the longer the value chain. In-house IT functions complement and support offshored IT functions, while offshored R&D functions tend to replace in-house R&D.