The Reshoring Phenomenon: technology as a driver for the location decision

Abstract

Offshoring is the process through which the company transfers some or all of its activities outside the national boundaries, in order to gain benefits in terms of cost, resources and market. This phenomenon, gaining ever-greater importance thanks to the many benefits that derived from it, became increasingly popular among companies that began to adopt it as their own strategy. However, in recent years we have witnessed a reversal of the offshoring phenomenon. The favourable conditions of the countries chosen for offshoring are changing: the low quality associated with overseas production, the increasing labour costs of developing countries, and the long waiting times between product design and development, push companies to bring their businesses back home. We see the emergence of the so-called reshoring phenomenon, as a return to the country of origin of previously offshored activities. This trend inversion is due to critical changes in international conditions and improved technologies. The aim of the following work is to understand the relationship between technology and the location choice, investigating whether the ever-increasing technological advances affect the reshoring decision; if technology can be considered a reshoring driver or not, and possibly what are the benefits associated with it. The thesis adopt a case study methodology based on the analysis of four European companies, since they based their reshoring decisions on technology. Findings from the analysed case studies seem to confirm the adoption of technology may contribute to the firm’s decision to repatriate production in the home country.

Keywords: Offshoring – Reshoring – Technology – Additive manufacturing – Advanced manufacturing – Case study