Offshoring, Outsourcing and Services FDI in Europe’s ‘Old Periphery’: Probing the Experience of Northern Ireland

The host economy implications of service offshoring and the ‘global shift in services’ have recently been explored in the context of various emerging economies. This study extends the literature to lagging peripheral regions of developed economies, which have hitherto been largely neglected, via a case study of Northern Ireland, a region in north-west Europe. The ‘structural characteristics’ (subsidiary attributes and network position) of services FDI projects attracted to this region since the mid-1990s are examined and some of the direct employment impacts on the host economy are considered. Two main types of operation are identified among the leading foreign investors: captive centres performing various IT-related (and other support) activities for their US parent companies in the financial service industry; and contact centres operated by foreign third-party BPO vendors, serving corporate clients in (mainly) the UK & Ireland market. The regional employment impacts of these two groups of investors have been quite different, with the former group providing fewer but higher quality, better paid and more stable jobs than the latter but also contributing to a widening sub-regional division of labour. Services FDI has partially transitioned the region from its branch plant manufacturing past but with qualitatively mixed results. Overall, this case has some interesting features that provide new insights to the service offshoring literature.