Outsourcing vs Offshoring

Outsourcing

• Hiring another company to perform tasks or services that could be done internally.
• Outsourcing can be within the same country or across borders.
• Used to cut costs, access expertise, or improve efficiency.
• Applied to non-core business functions like call centers, accounting, or data processing.
• Apple outsources its customer service operations to external firms.
• Walmart outsources warehouse and logistics operations to third-party companies.

Offshoring

• Relocating part of a company’s business operations to another country.
• Production or services moved to take advantage of lower labor costs or other benefits.
• Typically involves moving manufacturing, assembly, or service-based work to developing countries.
• Often involves establishing factories or call centers in countries with lower wages.
• Nike offshores much of its production to countries like Vietnam, Indonesia, or China.
• Apple offshores the manufacturing of its products to countries like China.

Key Differences Between Outsourcing and Offshoring

• Outsourcing involves hiring another company to perform tasks, potentially within the same country or across borders.
• Offshoring means moving business operations to another country, often for lower production costs.

Reasons for Outsourcing or Offshoring

• Cost Savings: Reduce costs on wages and avoid the cost of maintaining employees, and lower labor costs in other countries.
• Efficiency: Improve efficiency by outsourcing tasks to firms that specialize in those services.
• Access to Expertise: Gain access to specialized knowledge and skills the company may not have in-house.
• Globalization and Market Access: Expand presence in new markets and take advantage of local resources.

Impact on the Home Country

• Job Losses: Result in job losses in industries like manufacturing and customer service.
• Economic Effects: Can lead to negative effects like the loss of domestic jobs, and contribute to trade imbalance.
• Skilled Labor Shift: Involves shifting skilled labor to different locations.

Impact on the Host Country

• Job Creation: Bring job opportunities, especially in manufacturing or service sectors.
• Skill Development: Provide valuable training and skill development.
• Economic Growth: Help boost the economy, improve infrastructure, and create a growing middle class.

FRQ Considerations

• Define outsourcing and offshoring clearly.
• Describe the reasons for outsourcing and offshoring.
• Compare the effects on the home and host countries.
• Use clear examples of both outsourcing and offshoring.
• Analyze economic impacts: Job losses, cost benefits, economic growth, skill development.

ASEAN (Association of Southeast Asian Nations)

• A regional intergovernmental organization comprising 10 Southeast Asian countries.
• Formed in 1967 to promote economic growth, regional stability, and cooperation.

ASEAN Member Countries

• Brunei
• Cambodia
• Indonesia
• Laos
• Malaysia
• Myanmar
• Philippines
• Singapore
• Thailand
• Vietnam

Goals of ASEAN

• Promote peace and security in Southeast Asia.
• Increase economic cooperation and trade.
• Develop regional partnerships.
• Promote cultural exchange and understanding.

Key Features of ASEAN

• Focused on creating a more integrated economic zone in Southeast Asia.
• Countries work together on regional security issues and conflict resolution.
• Promotes programs that foster cultural understanding and human development.

ASEAN Free Trade Area (AFTA)

• Reduces trade barriers between member states to encourage the movement of goods and services.

Possible FRQ Prompts

• Explain the economic goals of ASEAN and analyze.
• Discuss the role of ASEAN in promoting political stability and resolving conflicts.
• Analyze ASEAN’s role in the context of globalization.

Why ASEAN Might Appear in an FRQ

• Economic Cooperation: Often tied to trade, globalization, and regional economic cooperation.
• Political Cooperation: Role in maintaining political stability and addressing issues like security.
• Cultural and Social Integration: Efforts to promote social development, cultural exchange, and human rights.

Important points to remember about ASEAN

• Emphasizes economic integration, political stability, and cultural cooperation.
• Pivotal in making Southeast Asia a more connected region .
• AFTA, regional security efforts, and collaboration on public issues are key aspects.
• Involvement in global trade, economic growth, and security makes it an important player.

AP Human Geography Terms and Examples

• The following include terms with clear explanations and real-world examples.

Outsourcing

• Moving production or services to a third-party company, often in a different country, to cut costs or improve efficiency.
• Apple and Microsoft outsource customer service to countries like India or China.

Offshoring

• Relocating part of a company’s production or service operations to a different country to reduce labor costs.
• Nike moves its manufacturing to countries like Vietnam and China.

Primary Sector

• Deals with the extraction and harvesting of natural resources.
• Agriculture, mining, and fishing. In Vietnam, rice farming.

Secondary Sector

• Transforms raw materials from the primary sector into finished goods and products.
• Car manufacturing in Germany.

Tertiary Sector

• Focuses on services rather than goods: retail, education, healthcare, banking, and entertainment.
• Tourism in Thailand.

Quaternary Sector

• Sector focused on knowledge-based activities: research, development, education, information technology services, and financial planning.
• Research and development in Silicon Valley.

Quinary Sector

• Involves high-level decision-making and the creation of new ideas or products: top executives, scientists, universities, and non-profit organizations.
• University professors/CEOs make high-level decisions about products/research that impact industries globally.

Globalization

• Process where businesses develop international influence or start operating internationally.
• McDonald’s has franchises worldwide.

Urbanization

• Increase in the proportion of people living in cities.
• Shanghai, China, experienced rapid urbanization.

Suburbanization

• Movement of people from urban areas to suburban areas.
• Los Angeles metropolitan area has experienced suburbanization.

Industrialization

• Economy moves from primarily agricultural to one based on manufacturing and industry.
• Industrial Revolution in England led to the growth of cities and the rise of factories.

Development

• Improving the economic, political, and social well-being of a country or region.
• South Korea has rapidly grown from a war-torn nation to one of the world’s most developed economies.

Core-Periphery Model

• Explains how economic, political, and cultural power is distributed between core and peripheral regions.
• In the United States, the Northeast is considered a core region.

Rostow’s Stages of Economic Growth

• Countries go through five stages of economic growth.
• South Korea moved through the stages.

Comparative Advantage

• Ability of a country to produce a good or service at a lower opportunity cost than another country.
• Brazil has a comparative advantage in producing coffee.

Sustainable Development

• Meets the needs of the present without compromising the ability of future generations to meet their own needs.
• Costa Rica uses renewable energy sources.

Urban Sprawl

• Uncontrolled expansion of urban areas into surrounding rural land.
• Phoenix, Arizona, has experienced urban sprawl.

Key Tips for FRQs

• Always define the term clearly.
• Give specific examples.
• Explain how the example relates to the question being asked.
• Link concepts to global patterns.
• Be concise but detailed.