Offshoring strategy for U.S. companies has more than doubled from 2005 to 2008 according to The Duke Offshoring Research Networks 5th Annual Report.

The report is a collaborative effort between The Conference Board, a global, independent business membership and research association and the Offshoring Research Network at the Duke University Centre for International Business Education and Research. The survey, now in its fifth year, examines all aspects of offshoring. These include drivers, risks, location and delivery models, performance outcomes and future plans, for a wide range of companies and industries in the U.S.

The report also confirms the globalisation of innovation -- the major finding of last year's report -- is continuing at an increased rate in all areas of industry. Speed to market and the domestic shortage of science and engineering talent are two key drivers for offshoring projects.

“Companies that have implemented a corporate-wide offshoring strategy often report significantly better performance in cost savings, meeting target service levels, improving relations with providers and overcoming internal resistance”, said Ton Heijmen, senior advisor, outsourcing/offshoring at The Conference Board, and one of the report's authors.

"Outsourcing innovation in engineering, research and development, product and software development and knowledge processes makes companies, whatever their country of origin, more competitive by increasing speed to market and compensating for domestic talent gaps." Heijmen concluded.

Other findings from the report include:

-Of all the offshoring/outsourcing projects initiated in 2007, most were related to product and software development

-The loss of managerial control and employee turnover were cited as the most important risks associated with the globalisation of innovation through offshoring

-Small and midsized companies are increasingly sourcing innovation offshore. Many of these companies find it difficult to compete for highly qualified talent domestically

-Small companies are also more adept at identifying and accessing new geographical talent clusters (i.e., Brazil, Egypt, Sri Lanka, Russia) and other locations outside of China, India and Eastern Europe

-Small companies are sophisticated users of web-based collaboration technologies and prefer specialized small provider