Reshoring and Manufacturers

Reshoring is the practice of bringing manufacturing jobs and services back to the United States—jobs that had been previously lost to offshoring efforts. In the past 40 years, an estimated three million to five million domestic manufacturing jobs have been lost to offshoring.1 In the new world we live in since the COVID-19 outbreak started, ever-changing circumstances create endless uncertainty. However, 2020 and the years to come present a unique opportunity to increase stability and profitability through reshoring initiatives.

Perhaps the most compelling argument in 2020 for reshoring efforts is to maintain control over supply chains, which have seen instability like never before due to the COVID-19 pandemic. The Reshoring Institute, a bi-partisan 501(c)3, found in its 2019 survey of global manufacturers, that over 70%2 of manufacturers experienced some type of supply chain delay in their overseas operations. While the figures are not currently available relating to the 2020 year, there is likely to have been an even greater impact due to the pandemic. In fact, Thomasnet????®, a register of manufacturers worldwide found in a June 2020 survey that 69% of respondents were “likely” or “extremely likely” to reshore,largely in part to create more resilient supply chains.  When supply chains are local to a manufacturer, lead times can be reduced, quality can be improved and relationships with the local supply chain can be grown and fostered.

A lesser known, but equally compelling, argument for reshoring is the preservation of intellectual property (IP) owned by the manufacturer. China continues to be a manufacturing powerhouse, and according the Economic Policy Institute, an estimated 2.8 million4 manufacturing jobs were lost to China since China’s admittance to the World Trade Organization in 2001. The manufacturers in China pose a threat to international manufacturers in that IP is at risk of being infringed upon due to lack of protections in China. CNBC found through a survey of Global CFO’s in 2019 that approximately one in five CFO’s reported having their IP stolen by Chinese firms within a year of the survey.5 Manufacturers invest substantial capital into the development of IP, and when that is stolen from them and used against them, the results can be catastrophic. Reshoring can prevent the theft of IP because U.S. protections are substantially greater and there is more recourse if IP were to be infringed upon.

While reshoring may not be the solution to all of the challenges presented to manufacturers, it certainly can be an option to help manufacturers weather the uncertain storm. The global pandemic, with all of its pain and struggles, also presents an opportunity to act, and the opportunity to capitalize on openings, and to rise above the challenges. Reshoring gives manufacturers the means to control their destiny and aid in the economic recovery of the United States.


1 https://reshorenow.org/?pageLink=blog-detail&blogLink=how-many-jobs-have-been-lost-to-offshoring-and-can-be-recovered-by-reshoring

https://reshoringinstitute.org/wp-content/uploads/2019/05/2019-Survey-of-Global-Mfg.pdf

3 https://blog.thomasnet.com/reshoring-creates-opportunities-for-manufacturers-in-2020

https://www.epi.org/publication/growing-china-trade-deficits-costs-us-jobs/

5 https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Tracking and Communicating COVID-19 at Your College or University
‘Tis the Season – Cybersecurity and Holiday Shopping
Coronavirus Fraud: Unfortunately, We Told You So
Secure Act in the Presence of COVID-19
Postcard from Schneider Downs Construction Industry Webinar

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office
Pittsburgh

One PPG Place, Suite 1700
Pittsburgh, PA 15222

contactsd@schneiderdowns.com
p:412.261.3644     f:412.261.4876

Map of Columbus Office
Columbus

65 East State Street, Suite 2000
Columbus, OH 43215

contactsd@schneiderdowns.com
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102