For at least four decades, we chased high tech and low cost labor around the world. Japan, Korea, Viet Nam, China, Mexico, Middle East, India, Africa. We formed joint ventures in those places because the local governments wanted their own companies, not just foreign nationals. Now it is the United States that is in need of foreign nationals to establish joint ventures and move manufacturing to the United States. I think it is high time for the changing tide and exclaim, “All Ashore That’s Going Ashore!”
“Shore,” you say. But, there is a question of what we mean by “shoring” and what is the best strategy and tactic for securing our future supply chains for everything from consumer goods to sensitive military secrets.
For four decades, we OUTSOURCED everything and moved much of our manufacturing and mining to “OFF SHORE” locations around the world, mostly to save labor and tax costs at the expense of transportation costs. It worked well for a long time. Many would like to see us “RESHORE” or “ONSHORE”manufacturing to the United States. The recent bills passed and signed into law provide benefits for companies that INSOURCE and bring back American jobs. Sometimes, it’s not cost effective or government regulations prevent that alternative through red tape, taxes, and environmental concerns that are real. In some cases people look to “NEAR SHORE” to North or South America with the right combination of labor costs, material availability, and government support.
Recently, Janet Yellen, the U.S. Treasury Secretary, suggested yet another term—FRIEND SHORE.” It may matters more that the country is a friend to trade with us. See https://www.bloomberg.com/news/articles/2022-07-18/yellen-touts-friend-shoring-as-fix-for-global-supply-chains#xj4y7vzkg Of course, that’s why we’ve had treaties since biblical times.
What’s your plan for next year and the next decade? What’s the right solution for your company?Is it INSOURCE, NEARSOURCE, OUTSOURCE, RIGHTSOURCE? It’s a good time to search out new suppliers, friends, and partners. It reminds me of words in the song from “The Titanic”—“near, far, wherever you are . . . you open the door.”