Islands of globalisation: Offshore Services and the Changing Spatial Divisions of Labour

Abstract

The changing international division of labour presents opportunities for developing countries to attract foreign investments and generate employment in the offshore service sector. This paper focuses on developments in the Philippines, which has become a large exporter of business process outsourcing services over the past decade. The sector employs close to 800 000 highly educated young workers, the majority of whom work night shifts in call centres. Where do offshore service firms invest in the Philippines, which spatial transformations occur as a result, and why? This paper maps the location of offshore service investments on a national and regional level and traces the genesis of service-based special economic zones (SEZs), which combine functions of service delivery for global markets with increasingly globalised consumption patterns. These service-based SEZs arise due to location choice factors of foreign investors in services offshoring, who require skilled labour and prefer modern and secure environments, modelled according to their home country. Changing government policies on spatial zoning facilitated the rise of these SEZs in central business districts in Metro Manila and existing powerful real estate developers not only enabled this development, but are also the primary local beneficiaries of this feature of contemporary globalisation.