Much attention has focused on the topic of offshoringÓ of information technology (IT) & other services to lower-wage locations abroad. OffshoringÓ of services generally refers to an organization's purchase from other countries of services that it previously procured or purchased domestically, such as software programming or telephone call centers. This report: (1) describes the nature of offshoring activities & the factors that encourage offshoring, (2) discuss what U.S. government data show about the extent of this practice by the private sector & Federal & state governments, & (3) discuss available data on the potential effects of services offshoring on the U.S. economy. Charts & tables.