ABSTRACT
Much is written on the increasing tendency of outsourcing in the production capabilities of industrialised states; but the phenomenon remains ill-understood, with little detailed analysis of the relative importance or cost-effectiveness of this widespread practice.1 This chapter seeks to inform the debate on outsourcing by presenting brief but detailed empirical evidence on the mechanics of outsourcing activity of British and German producers in one narrowly defined branch of manufacturing: the ceramic tableware industry. In reporting on differences in outsourcing strategies taken in the two countries, this chapter examines in particular:
• differences in the extent and methods of outsourcing typically undertaken in the two countries;
• differences in relative costs of quality-equivalent output produced in a selection of lower-cost producers;
• differences in the responses of the manufacturers in Britain and Germany to the growing competition from lower-cost economies;
• the implications for lower-skilled employees in industrialised economies, and the policy implications of these results.
