The division of tasks, offshoring and efficiency gains

Recent developments in information and communication technologies (ICT) and the growth of emerging economies such as China and India have not only increased international trade but have also led to offshoring of activities away from Europe. A firm's decision to move production away from Europe is based on cost-benefit considerations and comparative advantage. Effective policy responses call for a sound understanding of what types of activities are subject to relocation and of the relative strengths of the European knowledge economy. A project, funded by the SEEK research programme, aims to improve our understanding of the mechanisms of company decision making and their labour-market consequences. A team of researchers examined the role of technological change and globalisation for workers' jobs and firms' competitiveness. Based on the idea that occupations are bundles of tasks, they model the bundling and unbundling of tasks and analyse the factors determining their tradability. They examine whether individuals react to offshoring by switching the tasks that make up their occupation. Finally, taking a firm-level perspective, internationally active firms are compared to domestic firms with regard to ICT use and productivity.