Offshore manufacturing is the relocation of the production of goods to a different country than the one the goods will be sold in. It is the main production method for many countries in the globalized economy, and there are pros and cons to the practice. This video gives a general overview of what offshore manufacturing is and why it dominates the economy.
Offshore manufacturing is a lot more common today than it was in the past. One hundred years ago, most manufacturers of goods lived in the same country where the goods were to be sold. Today, a company may have its headquarters in one country, produce its goods in another, and then sell it in 30 more.
Offshore manufacturing is attractive to companies for a few reasons. The biggest reason is that other countries have lower labor costs. Offshore manufacturing often gets a bad rep for this practice because workers aren’t paid fair wages and don’t have perks like time off, a regulated schedule, insurance, and more.
Offshore manufacturing is also done so that a company’s production center is closer to the raw materials they need. The raw materials will often be cheaper in-country than if they are shipped to the country of the company. For more information, check out the video above.