The world of production is subject to many of the same forces as other industries right now, namely inflation, rising costs, and the need to drive efficiencies. With that, outsourcing is undergoing a transformation. We started with the simple nearshore – outsourcing to countries in close proximity and similar time zones, and off-shore – outsourcing to far-away places. Today, there are also right-shore, smart-shore, and onshore models all competing to be the right framework for turbulent business times.
Mykhailo Pimenov, EVP of creative content at Locaria, wants us to consider something new and something that’s likely to become the definitive framework for the industry in the very near future: no-shoring. While production is global, it’s not homogenous across different regions. “We’re undergoing a paradigm shift,” he says. “Recently, we’ve seen many businesses do away with the idea of borders. A person can be in a different city or country to their employees and that does not cause any issues.” Of course this shift is relevant to service industries only, where a laptop and a wi-fi connection are the only things needed to do one’s job well versus the industries where physical presence is still a daily requirement. Still, and with the pandemic’s influence, “the shift has already happened.”
Flexible and scalable
The main benefit of the no-shore model is the flexibility and scalability that it offers. “When a project lands today it’s much easier to gather people with the right skills based on specific needs, regardless of location, and build remote teams,” Mykhailo adds. “The project management office may be in proximity to the client but the work itself can take place elsewhere. Suddenly, you can tap into resources anywhere in the world; it gives everyone a lot more creative freedom.”
Additionally, no-shoring is “particularly important when developing global campaigns and there’s a requirement for work to take place across time zones and for production teams to be able to hand over projects between countries in order to meet delivery timeframes.” As such, no-shoring complements centralisation of content development, particularly for regional, hub, and global teams, supporting the efficiencies involved in that production model.
The creative freedom is made possible through the implementation of effective, established, and tested workflows between clients and vendors, including a network of freelances that can be relied on to scale or provide additional expertise when a project calls for it. This process ensures that creativity is married with efficiency at every step. “In a no-shore model, like Locaria’s, agile production methods are combined with workflows and advanced software while our teams collaborate with global brands to develop content that resonates,” Mykhailo adds.
As such “you can always find the solution in a landscape of borderless opportunity that’s driven by skills, not geography. The voiceover industry is a great example of this. The talent today gets a bigger share of opportunities and profit by acting as private entrepreneurs, instead of being bound to a single studio. The pandemic was a catalyst for this, forcing people to invest in sound equipment that transformed their homes into small sound studios. Suddenly, they can work for anyone in the world. We‘ve seen a similar trend happen in visual effects as well,” explains Mykhailo.
What kind of effect is this likely to have on local and global economies? “The next big battle will be about attracting talent and we’ll see cities competing for residents.” Mykhailo is referencing a prediction by the BCG Henderson Institute that the new global economy is going to consolidate around cities that are consciously working to attract talent. Migration is on the rise, bolstered by global conflicts as well as an increasingly mobile workforce that includes the non-university educated.
Tech start-ups have been hiring with a borderless global perspective from day one, privileging the right skills over the candidate’s location. Such mobility will give workers more choice on where to call home and, as we saw with the pandemic, many will choose to move away from the bustle of a large city in favour of more space and similar facilities, just on a smaller scale. “Businesses will also be moving based on this new criteria, which will affect production. Wherever there are new centres for development, that’s where the progressive businesses will be too.”
Inflation is the single biggest issue facing production today, caused by the rising fossil fuel prices resulting from Russia’s invasion of Ukraine. As the war unfolds, the prices remain high with “production costs rising by anywhere between 15% and 30%. Based on territory, such an increase is crucial to deciding if a company wants to produce anything at all.”
“Companies are really thinking about the budget that they have on their hands and working out how to spend it in the smartest way possible. Currently, in the US it is very difficult to get big ideas made with existing budgets due to increased prices. There’s very little room to manoeuvre. That’s why companies are looking to other places like Ukraine, Mexico, Poland, and Portugal where the creative idea can be realised within the existing budget and without compromises.”
Taking all the factors into consideration, it seems like no-shoring really is the flexible and scalable future that production needs to protect the quality of creative ideas while allowing them to see the light of day. “The no-shore model is going to evolve with the help of human resource, tech, and platforms that connect people and allow for seamless collaboration. For companies that want to keep their competitive edge in a difficult economic environment, they have to think ‘borderless’,” Mykhailo concludes.
Contact the Locaria team to find out more on how we can help you achieve your global content creation goals.