A decade ago, the Financial Times made a prediction. “The US is on course to regain its status as a global industrial powerhouse,” Peter Marsh said, based on a study that predicted the industrial renaissance would be in place by 2020.
Several factors, from lower energy costs coming our way to increasing labor costs in countries that have been able to undercut us in the past, should make American-made goods more appealing than those of many other countries.
At the same time, U.S. companies which had become disillusioned with the return on offshoring were beginning to consider “reshoring.” Offshoring typically saved a company 15%, much of which was eaten up by extra logistics costs, troubleshooting, travel, and communication issues. That’s before we even begin thinking about bad press, safety and quality concerns, intellectual property tangles, or disagreements about human rights and working conditions.
Were they right?
In 2020, of course, we had a global pandemic that disrupted supply chains so much that now Americans in all walks of life talk about disrupted supply chains.
Thomas Friedman, in his seminal book The World is Flat, suggested that American companies needed to get better at problem solving, more creative, and more flexible in order to compete successfully in the global marketplace. Improvements in logistics, automation, and other efficiency powerhouses are among the ways that U.S. manufacturers have done just that.
Forbes conducted a study of the trend that summer, and reported that 40% of respondents had direct experience of the reshoring phenomenon. That’s no small proportion. The factors mentioned by Forbes overlapped significantly with those reported by the Financial Times.
The U.S. government is calling for less dependence on foreign suppliers, and U.S. manufacturers are rethinking their ways from the ground up. Reshoring? It’s still one step forward two steps back, At least for the moment. Colossus Americanus may still be in the future.