Fewer British jobs are being offshored to India and China due to the recession, according to a new report in the Financial Times. And some companies, especially manufacturers, are now starting to relocate jobs in Europe and America to be closer to their most important consumers.
So does reverse offshoring, or “backshoring,” count as a legitimate trend?
On a theoritical level, a few economists think backshoring good jobs will stabilize the consumer base of the wealthiest countries and help steer the world economy out of the recession.
The business case for backshoring ranges from positive “Made in America” pr to better customer service. There is less of a risk that goods made abroad will be recalled for lead levels. It’s also possible that producing goods near your best customers will end up saving money on energy and shipping costs.
Major American companies such as Sallie Mae, Delta, Dell, the Home Shopping Network and IBM have all announced they are backshoring jobs, according to an article in Computer World.
But backshoring seems unlikely to offset the jobs lost abroad:
“Keep in mind that even IBM, just two months after its big ‘onshore’ splash of 1200 jobs to Iowa, announced it was sending 20,000 jobs to India,” says Christine Ferrusi Ross, Forrester Research’s vice president and research director of sourcing and vendor management.
Perhaps a more accurate term is “nearshoring.” More tasks will still be done abroad, but the final assembly will increasingly occur within the target market.
Let us know what you think. Is back/nearshoring good for business? Or is it just a pr stunt?
Image by Flickr user “Markusram,” CC 2.0.
