Reshoring

IBA Group
Mark Hillary

The calls for companies to explore reshoring keep getting louder, led largely by a new sense of nationalism in Europe that was on show during the recent European elections. Many voters are rejecting internationalism in favour of wanting to see more business done close to home.
There has also been a change in the cost of doing business in Europe. In fact, the FT reports that the UK is now the cheapest manufacturing location in all of Western Europe.

But in all the reports about reshoring becoming something of a trend, the focus is always on manufacturing, not the IT or IT service market. Intellectual services appear to be purchased from the best possible location and the talk of reshoring this year has not changed this.
The way IT services are purchased is certainly changing. The concept of an app store being taken from the consumer market and applied to enterprise systems is becoming a reality and cloud-based computing power on demand is becoming normal.

These differences in the way that IT projects are planned and delivered will ensure that customers continue buying from the best global location for their own needs. With most technology projects today the emphasis is on the required skills – if you can’t find them nearby then it’s only natural to look overseas and hi-tech services operate on a global platform.

So it is true that Panasonic is thinking about moving manufacturing back to Japan, and Otis moved their elevator production from Mexico back to the USA, but in IT development it looks like the future will remain global – bits and bytes can be delivered online unlike cars, DVD players, or elevators.

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