Outsourcing, Offshoring and the Deconstruction of Employment: New and Old Challenges in the Digital Economy

Forthcoming, The Deconstruction of Employment As a Political Question, edited by Amparo Serrano and Maria Jepsen, Basingstoke: Palgrave, 2017.

18 Pages Posted: 30 May 2017  

Jan Drahokoupil

University of Mannheim - Mannheim Centre for European Social Research (MZES); European Trade Union Institute (ETUI)

Brian Fabo

Central European University (CEU); Centre for European Policy Studies (CEPS)

Date Written: May 1, 2017

Abstract

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.

Keywords: outsourcing, offshoring, digitalization, labour platforms, working conditions, pay

JEL Classification: J08

Suggested Citation

Drahokoupil, Jan and Fabo, Brian, Outsourcing, Offshoring and the Deconstruction of Employment: New and Old Challenges in the Digital Economy (May 1, 2017). Forthcoming, The Deconstruction of Employment As a Political Question, edited by Amparo Serrano and Maria Jepsen, Basingstoke: Palgrave, 2017.. Available at SSRN: https://ssrn.com/abstract=2975363

Jan Drahokoupil (Contact Author)

University of Mannheim - Mannheim Centre for European Social Research (MZES) ( email )

D-68131 Mannheim
Germany

HOME PAGE: http://drahokoupil.blogspot.com

European Trade Union Institute (ETUI) ( email )

B-1210 Brussels
Belgium

Brian Fabo

Central European University (CEU) ( email )

Nador utca 9
Budapest, H-1051
Hungary

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres, 1000
Brussels, 1000
Belgium

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