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Manufacturing renaissance: return of manufacturing to western countries

In: Innovation and Entrepreneurship in the Global Economy

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  • Sam Tavassoli
  • Babak Kianian
  • Tobias C. Larsson

Abstract

This chapter argues that the location of manufacturing is gradually shifting to the west again, exemplifying the ‘manufacturing renaissance’. Such a claim is based on the recent observed trend and the discussion is contextualized within the established theory that has been able to explain the location of manufacturing, that is, the product life cycle (PLC) model. Then the chapter identifies and discusses the four main drivers of this new phenomenon: (i) rising wage levels in emerging economies; (ii) falling quality of business milieu in emerging economies; (iii) emergence of new process innovations in western economies; and (iv) rising demand for western-made manufacturing. Finally, it is noted that the return of manufacturing should be kept in proportion to the amount of manufacturing activities that are still being offshored to less developed countries (LDCs), and not all industries are coming back to the west at the same pace.

Suggested Citation

  • Sam Tavassoli & Babak Kianian & Tobias C. Larsson, 2015. "Manufacturing renaissance: return of manufacturing to western countries," Chapters, in: Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), Innovation and Entrepreneurship in the Global Economy, chapter 11, pages 261-280, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:15906_11
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    References listed on IDEAS

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    2. Karlsson, Charlie & Gråsjö, Urban & Wixe, Sofia, 2014. "Innovation and entrepreneurship in the global economy," Working Paper Series in Economics and Institutions of Innovation 385, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
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    Cited by:

    1. Mohr, Sebastian & Khan, Omera, 2015. "3D Printing and Supply Chains of the Future," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Blecker, Thorsten & Ringle, Christian M. (ed.), Innovations and Strategies for Logistics and Supply Chains: Technologies, Business Models and Risk Management. Proceedings of the Hamburg Internationa, volume 20, pages 147-174, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.

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    More about this item

    Keywords

    Business and Management; Economics and Finance; Environment; Geography; Innovations and Technology; Urban and Regional Studies;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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