Repatriation or Reshoring of Manufacturing to the U.S. and UK: Dynamics and Global Production Networks or from Here to There and Back Again

Abstract

There are three contrasting approaches to understanding the geography of production. The first approach emphasizes the importance of local agglomerations, the second intrafirm mechanisms, while the third highlights global relationships or global production networks (GPN) or global value chains. These explanations are partial, but complementary. This paper explores the restructuring of global production with a focus on the reshoring or repatriation of manufacturing production to the U.S. and UK. Our intention is to identify the drivers behind reshoring as the first stage toward developing a dynamic conceptual framework for understanding the global organization of production. Reshoring needs to be conceptualized by drawing on and combining approaches developed in GPN with micro-approaches to understanding firms including the development of a geography of production tasks. The study is based on a theoretical mapping to inform an empirical analysis of reshoring in both countries to identify and conceptualize the quantitative and qualitative causal drivers behind this process. The evidence suggests that reshoring is sector-dependent and is mainly driven by manufacturers’ cost-management and quality strategies combined with the importance of manufacturing products close to market. This involves a “total manufacturing cost analysis” in which access to a set of tangible and intangible inputs are key drivers behind dynamics of GPN.