AI and the offshoring of services
Outsourcing, offshoring and digital trade appear on 104 recent papers, but only one of them carries an AI, remote-work or online-labour keyword. If language models make call centres, coding and back-office work cheaper to automate than to offshore, the countries that built service exports on cheap labour face a new competitor. Is service offshoring already slowing?
What prompted this
Since October 2025, 104 papers carry an outsourcing, offshoring, digital-trade or trade-in-services keyword (44 in economics journals, 23 in finance, 22 in operations research): "outsourcing" on 29, "digital trade" on 18, "offshoring" on 13, "trade in services" on 12. Only one of the 104 also carries an AI, remote-work, telework, freelancing or online-labour keyword.
Questions
- Have service exports from India and the Philippines slowed in the tasks most exposed to language models (customer support, transcription, basic coding) relative to other tasks?
- Do firms replace offshore contracts with AI, or do offshore providers adopt AI and cut prices?
- Does the shift change who in the exporting countries loses, by skill and gender?
Data that could help
Service export statistics by category, online freelancing platform data on jobs posted and prices, and firms' outsourcing contracts and job postings.
Next step
Compare the growth of online freelance work in AI-exposed and non-exposed task categories since 2022 using platform data.