"Backshops" are offices with functions that do not need to be located in proximity to top management. As a result, such operations can be located with considerable geographic separation, and may take advantage of lower labor rates or less expensive office facilities at another location. For instance, if office functions for a major automobile manufacturer could be located in northern Michigan, where jobs are scarce and significant cost efficiencies are possible, this distant location would be a backshop office.
Such facilities have become more feasible as a result of the "communication revolution" beginning in the 1980s, when computerized transfer of information became practical. Such facilities are most likely when there is no physical product, but simply the transfer of information. However, backshops are also practical for physical products when the value-to-weight ratio is quite high, transportation considerations are reasonable, and the financial advantages of production in another location are significant.
Joel Garreau, author of Edge City: Life on the New Frontier, drew from interviews with business owners who indicated backshops had some distance limitations. They should be located no more than a 1-1/2 hour drive or 3 hour non-stop flight from headquarters, allowing management personnel to have face-to-face contact on fairly short notice when needed.
| Economic development | Economic development strategies |
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