Portal de Periódicos da CAPES

OFFSHORING AND OUTSOURCING IN CENTRAL AND EASTERN EUROPE: OPPORTUNITIES AND PERSPECTIVES

2016; Volume: 15; Issue: 1 Linguagem: Inglês

2545-4439

Yordan Ivanov,

Economic Systems and Logistics Management

In the rapidly changing global economy, offshoring and outsourcing have become popular businessstrategies for reducing the costs of companies. A high number of regions and countries have prоfiled andbecome popular offshoring and outsourcing destinations over the past 25 years – Central and South America;Central and Eastern Europe; Southeast Asia, China and India etc. Although, countries like China, India andIreland are traditionally perceived as main countries which receive offshoring and outsourcing businessprocesses, the region of Central and Eastern Europe also rises its popularity as such destination during the lastten years. Several core advantages contribute Central and Eastern European (CEE) region to become a topoffshoring and outsourcing destination and be competitive to the traditional offshoring and outsourcingcountries like India and China: lower salaries than these in Western Europe and other developed countries(comparable to the salaries in India and China), a relatively low risk prоfile region for key fаctors such as highlyeducated labor force and reliable infrastructure, relatively low inflatiоn pace of the employees’ salaries in theregion, labor with strong language skills, stable business and political environment, and geographicаl andculturаl proximity to the countries in Western Europe. The paper is developed based on secondary data andinvestigated the theoretical aspect of the terms offshoring and outsourcing and their versions. The CEE isdetermined based on different sources which have their contradictions in defining the borders of the region. Theauthor perceived the World Bank understanding that the CEE region covers EU countries - Bulgaria, Croatia,Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The currentpaper aims to make an analysis of the opportunities and perspectives of CEE region as offshoring andoutsourcing destination. The first purpose of the author is to investigate the current position of CEE region asoffshoring and outsourcing destination. The paper also examines the reasons for the advent of the region tobecome a receiver area. The second purpose is to analyze the foreign direct investment (FDI) net inflows in CEEfor the period 2004-2015 and compare the results of the different economies. The time period is chosen becausemost of the investigated countries joined EU in 2004. The analysis is based on World Bank data. The currentmanuscript could be used as a base for a future studies in the investigated area. Future researches couldinvestigate the potential of Central and Eastern European region and also the potential each country to developas attractive offshoring and outsourcing destination. Furthermore, the scholars could outline the futuredevelopment trends and forecast the FDI net inflows during the following years.