Industrial restructuring has been one of the main economic developments in the EU in recent decades, especially influencing the manufacturing sector, and leading to real concerns about the process of deindustrialisation in Europe. A more recent trend, which has received a great deal of political and media attention, is the apparent increase in the international sourcing of services.

The international sourcing of services as a business model is being facilitated by technological developments, especially within ICT, allowing enterprises to codify and transfer information and knowledge globally. Another significant facilitator is increased globalisation within services markets as a consequence of market deregulation and trade liberalisation, including recent measures taken within the EU.

As the majority of service functions require a proximity to markets and clients, the initial focus for the international sourcing of services was mainly concentrated within back-office functions (for example, IT services or finance/accounting), enabled by the increased use of ICT and Internet connectivity. However, there has also been a move to delocalise various functions that focus on customer contacts (for example, the use of intelligent telephone software since the late 1990s, especially for call centres).

The objective of this new development project on international sourcing, which was launched in 2006, is to provide policy makers at a national and European level with relevant statistical information on the reasons for, the extent of, and the consequences of, international sourcing.

In the current debate, the phenomenon of international sourcing has a variety of labels and terms, such as off-shoring, near-shoring, delocalisation, relocalisation, outsourcing, or insourcing; these are often used without explicit definitions. The somewhat generic heading of international sourcing has been chosen because there is no generally accepted definition for the phenomenon. However, the project concentrates on the international sourcing of existing functions/activities of enterprises performed in-house or domestically sourced to either non-affiliated (external supplier) or affiliated enterprises located abroad. It is important to emphasise that the current discussions about the magnitude and impact of international sourcing are mainly based on anecdotal evidence, as no harmonised and internationally comparable official statistics covering the phenomenon and providing a global picture have been available.

Data	Publications

In order to produce new indicators, an operational survey tool and a methodology for monitoring the factors driving international sourcing were developed. Based on the survey tool and methodology first results have been established.

Based on initial survey results for 12 European countries (in enterprises with 100 or more persons employed) between 2001 and 2006:

• most international sourcing of core business and/or support functions remained intra-EU;
• international sourcing was most common among Irish, British, Danish, Finnish and Slovenian enterprises;
• manufacturing enterprises sourced far more than enterprises active in other sectors of the economy: well over 50 % of Irish and British manufacturing enterprises participated in this process, and over one third of Danish manufacturing enterprises;
• in Ireland, Italy, Sweden and the United Kingdom more core business than support business functions were internationally sourced;
• among supporting business functions, the international sourcing of distribution and logistics, as well as marketing and (after-) sales was most widespread;
• over the period 2001-2006, 16 % of enterprises surveyed moved some of their business functions abroad.
• the main motivation for moving functions abroad was to benefit from a reduction in labour costs (45 % of enterprises – multiple answers possible).

Plans for International Sourcing in Europe in 2007-2009 - Statistics in Focus 
74/2009

Features of International Sourcing in Europe in 2001-2006 - Statistics in Focus 
73/2009

International sourcing in Europe - Statistics in Focus 
4/2009