Is Reshoring the Future?

IBA Group
Mark Hillary

Earlier this year at the World Economic Forum in Davos British Prime Minister David Cameron gave a speech that highlighted reshoring as a key objective of his government. In his speech Cameron said:

“In recent years there has been a practice of offshoring where companies move production facilities to low cost countries. We’ve all seen it. We all know it’s true. And it will continue.

But there is now an opportunity for the reverse: there is now an opportunity for some of those jobs to come back.”

Cameron focused mainly on the manufacturing sector. He cited examples such as the Horby model company bring production back from India to the UK and Raspberry Pi computers moving production to Wales.

What he said makes sense for these companies. By reducing the complexity in a manufacturing supply chain there is the opportunity for these companies to react faster to the market than if their products needed to be ordered many months before delivery.

Cameron went on to acknowledge that this is not a simple argument. He is not describing an ‘us’ v ‘them’ world:

“…I’m not saying there is a finite number of jobs in the world and that our success depends on some kind of tug of war to win them back at the expense of the East.”

But Cameron’s concept of reshoring is very focused on companies and processes that require a physical product delivery. He talked about call centre jobs moving closer to home, but the change in call centre strategy over the past decade has been well documented – people prefer to have their calls answered closer to home.

For many other professional services there is effectively now a global market. Graphic designers, advertising, accounting, and IT professionals are now operating within a global community of expertise and with instant delivery of products via the Internet there is no supply chain difficulty.

So it doesn’t seem like the UK government focus on reshoring will affect those companies or individuals supplying technology expertise. These services are usually sold based on the expertise required, not simply on a low price alone – allowing a global search for the best possible skills wherever they may be found.

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