Since 2002, U.S.-based software and hardware product companies have increased offshore outsourcing work to India, China, Russia, Ukraine, and other countries. Total offshore engineering product development has significantly increased in recent years. While cost is still a motivating force, time to market and access to talent and growth are on par with cost as drivers toward R&D globalization. As global R&D models become part of several organizations’ engineering strategies, managers are beginning to discover the nuances of offshore operations.

Many companies looking to offshore models have moved beyond the initial hourly rate charged. If not for the cost savings, there would be little impetus to move resources from one location to another. In fact, in today’s venture capital-driven economy, this labor arbitrage is what allows new companies to scale quickly while coping with limited cash.