The practice where a company contracts with another company (often in a different country) to perform specific tasks or services is a key element of contemporary economic geography. This involves the delegation of non-core operations to external entities, frequently driven by cost advantages or specialized expertise found in other locations. For example, a manufacturing company in a developed nation might contract with a factory in a developing nation to produce components, or a technology firm might employ a customer service center located overseas.
This spatial redistribution of labor has significant implications for global trade patterns, economic development, and employment structures. Its benefits can include reduced production costs, increased efficiency through specialization, and access to a larger pool of skilled labor. Historically, this process has been facilitated by advancements in transportation and communication technologies, allowing for seamless coordination across geographical boundaries. It has become an integral part of global supply chains and shapes the economic landscape of both the originating and receiving countries.