International Economic Development Council ­ Four
Strategies to Encourage Reshoring Learned at IEDC's
Leadership Summit
By Dana Crater and Tye Libby, IEDC
Reshoring – the practice of returning manufacturing and services to the United States from overseas – is a hot
topic among many economic developers. At IEDC’s 2016 Leadership Summit in January, more than 50
economic developers participated in a series of discussions on the topic. To kick off the conversation, Harry
Moser of the Reshoring Initiative shared some encouraging statistics:
According to the Boston Consulting Group, the number of multinational companies with at least $1 billion in
annual revenues that are actively reshoring increased 140 percent since 2012.
Medical Design Technology magazine reports that nearly half of offshored medical device companies are
now reshoring.
A survey from Plastics News and Nexant found that 70 percent of plastics manufacturers have already
reshored or will soon.
Walmart’s Made in America initiative continues to make progress towards its goal of purchasing $250 billion
in products by 2023 that support the creation of American jobs.
Yet many companies trying to return to the United States are doing so without help from an economic
development organization. Clearly, economic developers can help accelerate the trend. Participants
brainstormed strategies around four themes:
1. Incorporating reshoring into business retention and expansion (BRE) efforts,
1. Attracting the attention of reshoring companies,
1. Preparing a manufacturing labor supply, and
1. Highlighting smaller community assets that are attractive to reshoring companies.
Here’s what we learned.
Incorporate reshoring into BRE efforts
Business retention and expansion meetings are an excellent forum for economic developers to connect with
companies that work with foreign suppliers. By understanding a company’s supplier network and the materials
needed for inputs, an economic developer can help the company identify opportunities to buy local and shorten
their supply chain. Many companies don’t consider logistical costs when purchasing from foreign suppliers.
Economic developers can bring attention to these costs using tools such as the Total Cost of Ownership
Estimator.
Alternately, on a BRE visit to a supplier, the economic developer can ask which companies they previously
contracted with but lost to foreign competitors. With this information in hand, the economic developer can meet
with local manufacturers to help rekindle previous partnerships or begin new ones.
Regular meetings with corporate headquarters can keep a community aware of reshoring opportunities. When
meeting with company leaders, economic developers can ask what issues they are experiencing overseas and
use the opportunity to start a discussion on reshoring. For companies with products that could be sold to
Walmart, make sure they’re aware of the company’s Made in America program.
Incentives can play a role in the retention and expansion of manufacturers. Enterprise zones and tax increment
financing can aid expansion and modernization. In addition, the U.S. Economic Development Administration
(EDA) has funds available to support reshoring projects through its Public Works and Economic Adjustment
Assistance Programs. (If you have a reshoring project and need funds to help make it a reality, talk to your
regional EDA office as soon as possible!) Customized training programs are another useful tool to incent firms
to reshore.
Attracting the attention of reshoring companies
A common question is how to identify companies that have the potential to reshore. The easiest way is to work
with companies already in your state or region. Schedule a meeting with companies that have offshored and
talk to them about the challenges they may be facing abroad to initiate a conversation on reshoring. Although
some decisions are made by company headquarters, others are made by the factory division.
Don’t neglect smaller companies, because these may be part of a larger operation that’s testing the waters, with
plans to reshore more jobs if the initial run goes well. The Institute for Supply Chain Management offers
regular meetings that economic developers can attend to speak with participants about reshoring opportunities.
In many cases, supply chains source raw materials from overseas, then ship them closer to the end market for
actual production. Analyzing supply chain gaps may reveal opportunities for local suppliers to fill.
Foreign trade zones can offer advantages for reshoring for companies that want to export to non­U.S. markets. Another suggestion shared was to look at the products brought in through ports to identify companies
purchasing from abroad, and to meet with them to see if a local supplier can fill their needs.
Preparing a manufacturing labor supply
One of the most immediate steps economic developers can take to encourage reshoring is to help ensure an
available workforce. To do so, many mentioned the need to change the image of manufacturing. Familiarization
tours allow students and parents to see for themselves that today’s manufacturing jobs aren’t the same as their
grandparents’. The consensus among the group was that eighth grade is the optimal age to get students
interested in manufacturing. Robotics programs are a popular way to spark interest.
The first Friday in October is Manufacturing Day, a great time to educate students about opportunities in the
field. With simple changes in terminology, educators and community leaders can make manufacturing jobs
more appealing. For example, students can learn skills for a profession, rather than for trades or vocations.
After all, today’s manufacturing industry uses academic, technical, and manual skills that span a wide range of
professions. Teachers can be active partners. “Externships” for educators to visit manufacturers during the
summer can help them gain a better understanding of the field and bring a more complete message to the
classroom.
Economic developers also are building partnerships with high schools to offer apprenticeships similar to those in
Europe. A program by the Greater Hall Chamber of Commerce in Georgia connects high school students with
paid internships at local manufacturers. The students receive training while in high school with the promise of a
job once they graduate. In addition, forming partnerships with universities and community colleges offers
students the opportunity to gain hands­on skills to supplement their academic work.
Reshoring opportunities for smaller communities
This discussion covered the drivers behind reshoring and noted that small and rural communities possess many
assets that reshoring companies seek. Reshoring companies frequently cite quality control, transportation time
and cost, dependability, intellectual property, worker turnover, wages, logistics, political disruption, and energy
as influencing their decisions to reshore.
Smaller communities frequently can offer larger sites, a lower cost of living, better access to political and
community leaders, less highway congestion, and a competitive workforce in terms of wages and work ethic. All
these assets should be clearly communicated to companies that are considering reshoring. Participants also
advised one another to leverage the younger generation’s interests in local products, good air quality, natural
amenities, and overall quality of life in order to attract new companies.
* * *
IEDC has created the Reshoring American Jobs webpage to provide economic developers with free tools to
assist companies with reshoring decisions. It also includes recordings of web seminars, white papers, notices of
reshoring in the media, and more.
This project was made possible by funding from the U.S. Economic Development Administration. The
statements, findings, conclusions, recommendations, and other data in this report are solely those of IEDC and
do not necessarily reflect the views of the U.S. Economic Development Administration. This article and the
discussion sessions are part of a larger compendium of research focused on providing resources for reshoring.