Thursday, April 7, 2011

Reshoring: Trend or Not?

I recently took part in a multi-state discussion via conference call on the concept of reshoring.  It's sort of the opposite of off-shoring.  The term implies U.S.-based manufacturers who took production work outside of the U.S. bringing it back home.

Much of the evidence that this is a trend is still very much anecdotal.  Everyone who chimed in and, presumably those that were on the call but didn't chime in, could think of one or more example, but none could confirm it was, indeed, a trend.

I'd like to think it could be a trend in the making.

For 25+ years, one almost never heard of a U.S. company choosing Germany or Japan as a place to take manufacturing for return of the product to the U.S.

In part, I'd say that's because population demographics showed a predictable decline in population in the those nations.  Not surprisingly, in fact, it was Germany and Japan that were choosing to bring production to the U.S. instead.

Could the same be true of China some day soon?  Yes.

With UN predictions of a decline in population hitting there in less than 25 years, it could be.

To me, that's the easiest predictor that reshoring is more than just a collection of stories and, in fact, a trend.

It's also a predictor that Chinese companies will be doing what Japanese and German manufacturers did years ago too--look to move manufacturing to the U.S. with foreign direct investment.  That's a pretty darn good trend too.

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