Insourcing is the opposite of outsourcing; that is insourcing (or contracting in) is often defined as the delegation of operations or jobs from production within a business to an internal (but 'stand-alone') entity that specializes in that operation. Insourcing is a business decision that is often made to maintain control of critical production or competencies. An alternate use of the term implies transferring jobs to within the country where the term is used, either by hiring local subcontractors or building a facility.
Insourcing is widely used in an area such as production to reduce costs of taxes, labor, transportation, etc.
To those who are concerned that nations may be losing a net amount of jobs due to outsourcing, some point out that insourcing also occurs. According to a study by Mary Amiti and Shang-Jin Wei[1], in the United States, the United Kingdom, and many other industrialized countries more jobs are insourced than outsourced. They found that out of all the countries in the world they studied, the U.S. and the U.K. actually have the largest net trade surpluses in business services. Countries with a net deficit in business services include Indonesia, Germany and Ireland.
Insourcing may be done by "onshoring." Insourcing delegates certain work to a different company, which may come from a different country in the case of onshoring.
As is common with new terms, ambiguity persists about the most appropriate use of insourcing and onshoring. Not necessarily correctly, insourcing has described just its subset of onshoring cases: The Organization for International Investment, a Washington, D.C. trade association, uses insourcing to describe the creation of jobs through foreign direct investment within the United States. Onshoring has described cases with no foreign direct investment: Onshoring has described just a company's decision to stop outsourcing, returning work to home country employees within the company or insourced from another home country company, according to the McKinsey Global Institute, which is the official "business and economics research arm" of McKinsey & Company, a global management consulting firm [1].
Researchers take note: These terms may evolve. The prefixes to "-sourcing" and "-shoring" remain in flux: Outsourcing gave rise to the term in-sourcing, and offshoring resulted in on-shoring. However, onshoring is sometimes called in-shoring. In time, the McKinsey Global Institute's description of releasing offshore ties to keep jobs at home may become simply onshoring, while attracting foreign direct investment into a company's home country may become inshoring of such FDI. For now, any research into insourcing should include searches into its subsets of onshoring and inshoring, which some still use interchangeably.