Reshoring: An Overview, Recent Trends, and Predictions for the Future

With the rise of globalization beginning in the 20th century, came the inevitable rise of offshoring — companies moving at least some parts of their operations abroad in order to cut costs and increase profits. In recent years, however, international developments, such as the rise of wages in what were typically considered low-cost countries, coupled with uncertainties created through global political tensions, have incentivized companies to move their operations back to their respective home countries or to make new investments in United States-based facilities. This phenomenon, known as reshoring, has only increased in 2020 and 2021, amidst US - China tensions and the COVID-19 pandemic. Reshoring is growing in popularity particularly among companies based in the United States. In May 2021, for example, a US solar energy systems manufacturer called GAF Energy announced that the company would relocate its operations from Asia to Silicon Valley, expecting to add 400 jobs in research, engineering, and manufacturing roles (Szal, 2021). Around the same time, cycle and treadmill machine maker Peloton announced that it would invest $400 million to build its first US-based factory, citing heightened demand and the pandemic highlighting uncertainties that come with its global supply chain (Thomas, 2021). The company, which has announced that the US factory will be based in Troy Township, Ohio, stated that it expects to create over 2,000 jobs in the area. Also, in May 2021, Ford Motor announced a joint venture with South Korean battery maker SK Innovation to manufacture battery cells for electric vehicles in the United States (Wayland, 2021). The venture will be based in the US, marking a significant decision for Ford Motor, which operates worldwide and has notably been in the press in recent years for its decisions to offshore operations. (the rest omitted)