Digital transformation helps fuel U.S. manufacturing, relocation initiative says

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The impact of the pandemic on the supply chain sparked much debate about the role of foreign suppliers in critical product categories, and at the time many companies affirmed their intention to relocate certain operations.

Fast forward to today…did those corporate American promises come to fruition? According to the Reshoring Initiative, the organization run by Harry Moser and designed to help bring back American jobs, the answer is yes.

Recently released data indicates that in 2021, job postings for relocation and foreign direct investment (or FDI) rocketed to a record high of 261,000 for the year. The group says the additions have helped total relocation job gains to a monumental 1.3 million since 2010.

As the number of companies reporting relocation and FDI hits a new high with more than 1,800 companies, the Relocation Initiative believes the momentum will continue, saying preliminary data suggests a continued increase in 2022.

The company owes the large increases in reshoring “almost exclusively to companies filling gaps in the supply chain of essential products, including power batteries, semiconductors, PPE, pharmaceuticals, rare earths and renewable energy,” helped in part by a push from private and federal entities. .

In a recent blog published by global manufacturing company Ericsson, another critical factor is driving this trend: the digital transformation of US manufacturers. By closing the efficiency gaps and reducing the cost reductions that drove offshoring decisions, companies can advance the calculations in favor of returning more production to US shores.

Image credit: TIU

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