Beyond Cost: The Role of Intellectual Capital in Offshoring and Innovation in Young Firms

Abstract

Using the intellectual capital perspective as a theoretical framework, we develop a conceptual model of offshoring of knowledge–intensive, complex work by young, entrepreneurial firms. We posit that the unique qualities of human, social, and organizational capital of such firms drive them to offshore complex, nonroutine activities to foreign vendors. In addition, we argue that offshoring of such activities can lead to innovation under certain intellectual capital configurations.