Nearshoring is a business strategy and model in which a business is carried out by outsourcing activities to another one located in a close country or the same geographical region.
In the worldwide economy of today, businesses have focused on creating a constant investigation and analysis with the goal of achieving higher profitability, in such a way that new strategies arise through time. Such strategies had been about the location and relocation of their production and workspaces.
With the appearance of digitalization, geographical distance is no longer a big problem and businesses are betting on nearshoring.
The term comes from near and outsourcing. Normally, nearshoring is used to reduce costs while maintaining geographical and cultural proximity.
When outsourcing businesses nearby, there is the possibility of taking advantage of less labor and operative costs, as well as keeping more capacity to supervise and control the quality of their products and services. Nearshoring also provides higher flexibility in terms of delivery and response time.
Nearshoring grew stronger in these last year, especially in the Information Technology (IT) industry and other services related to technology as operative costs may be significantly lower prices in nearby countries
The most common countries used for this strategy are those that offer a nice combination of reduced cost of labor and qualified workforce, as Mexico is for the United States.
The advantages of nearshoring are linked directly to the company’s line of business and specific strategy. It is important that those countries that offer a bigger commercial advantage and incentive offer will be those that highlight nearshoring destinies.