ABSTRACT
This chapter empirically engages with the question whether and how services offshoring contributes to human capital development in developing countries. It focuses on one of the world's largest beneficiaries of the services offshoring trend, namely the Philippines, and uses interview and survey data collected among dozens of business process outsourcing (BPO) workers in Metro Manila to examine how the industry utilises the skills of its workers. The chapter summarises the literature on labour skills effects generated by services offshoring. Skill development initiatives for workers may differ depending on the offshore services segment a firm operates in and on the firm's position in the value chain. The central idea is that the 'on-the-job' development of additional capabilities enhances labour productivity and increases opportunities for firms and the industry at large to diversify into new services tasks, apply more advanced technologies and production processes, and move up into higher value-added parts of the value chain.
