ABSTRACT
This chapter focuses on the offshoring and outsourcing of manufacturing activities. It reviews the different conceptions of the global factory used in the literature. The chapter considers why firms choose to offshore manufacturing activities, what are the implications for the global distribution of the value-added in the resultant global value chains. It also includes why some multinational enterprises choose to reverse the off shoring process. It addresses the issues of why firms may choose to vertically integrate their value-chain activities, why firms may instead decide to outsource manufacturing activities either offshore or within their domestic economies, the empirical evidence on the growth of factoryless goods producers, and what determines the extent of the outsourcing. The chapter highlights some methodological problems encountered in empirical studies, suggests areas where further research is merited. It also considers the implications for the global factory of the latest wave of new manufacturing technologies including robotics and additive manufacturing.
