This story is from the 2015 Access 25. Explore more from this issue

Next-Shoring

Shifts in global wages, purchasing power, and energy supplies are complicating the calculus behind global manufacturing decisions.

January 2015

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If offshoring was the manufacturing buzzword of the 1990s, next-shoring is poised to replace it — if it hasn’t already. But if you think rising wages in China and new U.S. shale oil production will “reverse the boats” on global manufacturing: not so fast, say experts. It’s much more complicated.

Many industries locate manufacturing close to demand, making established manufacturing ecosystems hard to displace. This benefits Asia in some industries — high-tech, most famously — and the West in others.

What’s more, 3-D printing and advanced robotics are poised to become the next big factors in the next-shoring era, according to experts. As a recent McKinsey report puts it: “Next-shoring isn’t about the shift of manufacturing from one place to another but about adapting to, and preparing for, the changing nature of manufacturing everywhere.”

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