Nearshoring

This week’s Economist points us to the growing rise of nearshoring in the Euro zone. Basically, businesses in rich European countries are outsourcing work to less rich European countries rather than to price-beating China or India because of a preferable mix of geographic proximity, cultural compatibility and talent. Categories such as fast fashion as popularized by Zara and Mango have benefited. Skype’s got a development center in Estonia.

As market forces would have it, nearshoring has become a trend that’s being followed by offshore suppliers as well. Firms based in China, India and Turkey are already investing in factories and offices in the ex-communist region of Europe.

In the end, nearshoring may just be signalling an opporunity for specialized offshore companies to play on a more global field by coming closer to the clients. Let the race for multinational outsourcing begin.