Popularization of Nearshoring In Eastern Europe- A Study to Understand the ‘Why’ Behind

Nearshoring refers to transfer of work to another organization in the nearby region. For instance, for UK based business units, Europe is the Nearshoring region; companies will prefer to outsource or Nearshore within its boundaries basically due to its data protection laws. While selecting the business model, businesses Nearshore operations and projects to area nearby while keeping cost-effectiveness, small time- zone differences and fewer cultural discrepancies into mind. Proximity on one side allows for lesser cost, less expensive traveling while on another side a greater control and time-based decision-making in any critical situations. Offshoring as another child of relocation of a business process is to a more distant location where wages are lesser leads to significantly reduced overall production cost. Asian countries like- India, China, and also the Philippines are a few notable examples of such off-shoring locations for many ‘Western’ companies. Several aspects like different time zones, greater distance, various cultural differences, and also the language barriers, impact the business process significantly. (Nearshoring-vs-offshoring, 2018) Eastern European countries like- Poland, Romania, Czech and a few other are favorite nearshoring destination due to familiar financial and legal laws; stable social and economic structure; and growing technical talent within the region. However, ‘more and more’ for ‘less and less’ is not the only factor which the firms must look for, they must ensure the overall incentives and benefits to leverage their business. The present study is a secondary data based exploratory study which attempts to understand the concept of Nearshoring. It further endeavours to comprehend ‘how’ Nearshoring is replacing outsourcing at a fast pace and to learn ‘why’ eastern European countries are the favourite Nearshoring destinations.