What is the definition of 'offshoring'?

Offshoring refers to the practice of transferring a company's production, services, or processes to a different country, typically to take advantage of lower labor costs, reduced operational expenses, or favorable regulatory environments. The correct definition emphasizes the common practice of relocating production to low-income countries, where companies can produce goods at a lower price point, increasing their competitiveness in the global market.

This concept is often driven by cost reduction strategies, leading organizations to outsource production to developing nations where wages are generally lower. Offshoring can also encompass aspects of globalization, where companies seek to optimize their supply chains and efficiently tap into global labor resources.

In contrast, the options that mention higher-income countries, climate migration, or adaptation strategies do not align with the definition of offshoring. Moving production to a higher-income country typically does not represent the cost-saving motive behind offshoring. Climate migration and adaptation strategies pertain to environmental responses rather than the economic strategy of relocating production activities.