The residual impact of offshore outsourcing on learning and innovation for emerging-economy suppliers: evidence from the apparel industry of Pakistan

Offshore outsourcing of advanced tasks, such as research and development (R&D) and innovation, is becoming more common in our interconnected world. While a body of knowledge exists regarding the outsourcing of innovation, its impact (learning, upgrading and adopting new technologies and processes) on emerging economy suppliers (EESs) is unclear. We know even less about how these EESs evolve and what influences their involvement in innovation outsourcing. The current chapter explores the impact of innovation offshoring on EES innovativeness. To better understand this relationship, a qualitative in-depth study was conducted to examine the learning, adopting and upgrading processes in four case study EES apparel firms from Pakistan. The findings suggest that innovation offshoring connections coupled with EESs’ own innovation strategies are valuable for learning, acquiring resources and developing market knowledge and competencies that enhance the EES firms’ offerings, operations and movement in value chains, particularly for international expansion, if strategized carefully.