How is "offshoring" primarily driven?

Offshoring is primarily driven by the objective to reduce operational costs. By moving business processes or production to countries where labor and other costs are significantly lower, companies can achieve substantial savings. This cost reduction is often a major incentive for businesses looking to remain competitive in the global marketplace.

While improving product quality or enhancing customer service may also be important considerations for companies, the primary motivation for offshoring is typically financial. It allows firms to redirect funds that would otherwise be spent on higher domestic wages and operational expenses toward other strategic initiatives.

Additionally, offshoring does not inherently lead to an increase in local employment, as it often results in job relocation away from the company's home country. Thus, reducing operational costs stands out as the central reason for choosing to offshore business functions.