Outsourcing, offshoring and the deconstruction of employment: New and old challenges

This contribution analyses the interplay between outsourcing and the spatial organisation of work. We provide an overview of different types of process that shift work across company boundaries and in space, discuss the different impacts on the nature of employment and identify the relevant strategic issues for workers as well as the possible regulatory responses. We argue that outsourcing and also offshoring epitomise a variety of mechanisms through which the institutions that have been established to regulate the employment relationship can be evaded, leading to negative effects on pay and working conditions. In this context, technology plays an important role not only in helping to undermine the political basis of the employment relationship, but also in weakening its economic rationale. More specifically, the use of technology reduces the transaction costs involved in accessing labour through the market mechanism and in coordinating activities across space. As evidenced by the example of platforms, technology can also address market failures that provided the economic rationale for the employment relationship. Finally, given the territorial nature of existing regulatory mechanisms, the spatial dimension is key to understanding the impact of outsourcing, as well as the possibilities for addressing such practices through regulatory responses.