Tête à tête? Nearshoring in Europe of Consulting Engineering

Paper in proceeding, 2014

Global sourcing of engineering is becoming a more common way to increase a company’s competitiveness and includes the nearshoring and offshoring strategies of relocating engineering services and activities across national borders.. The driving force of why nearshoring and offshoring can often lead to competitive advantage is the combination of cost reduction and the opportunity of exploiting competent resources. Several emerging countries in Europe offer high quality engineering at a lower cost than the Scandinavian market. These countries are located within an acceptable travel distance from Scandinavia and due to similar standards and eurocodes the differences between countries’ engineering procedures have decreased. The aim of this contribution is, first, to investigate a Scandinavian based consulting engineering company’s experiences using nearshoring and, second, why standards and eurocodes can open the European engineering market and consequently how consultancy companies within engineering in Scandinavia can take advantage. This paper is based on international business theories regarding strategies and incentives with global sourcing, nearshoring and offshoring. The empirical research is built on a case study where interviews have been conducted with engineering consultants working in different locations. The case study is a nearshored large infrastructure project and involves collaboration between two companies with multiple locations. Engineers working in the project are distributed geographically in several European countries. The case firm strategy followed is multiple: sourcing of engineering services is done in-house, outsourced, offshored, using competing companies and using captive local investment. Even within the project frame, trust, communication and proper (soft) management are important. The results show that a transactional approach to collaboration is insufficient and that the nearshoring firm can be seriously challenged in its strategy when trying to enable knowledge integration. Standardisation through eurocodes lowers the barriers for the cross national collaboration, even if concepts such as functional roads are still interpreted in different ways.