This weeks issue of The Economist magazine features a brilliant report on outsourcing, offshoring and the birth of “reshoring”. According to the report, big companies like Google, Apple and GE are now moving some of their manufacturing back to the United States, medium sized companies are also seeing little savings in offshoring all manufacturing and are also moving back, and even companies from BRIC countries (.e.g. Lenovo) are foregoing cheap labour and looking to manufacture their products close to where their customers are (Lenovo are opening a plant in the US). A study highlighted by the report, and conducted last year, found that 37% of US companies with sales above $1B USD were looking to reshore, and 48% of US companies with sales above $10B USD were looking to do the same. Although reshoring is still largely an American phenomena (as was offshoring), and there are still less than 100 “big companies” committed to reshoring (according to The Economist), it does seem that manufacturing jobs are starting to creep back into the western hemisphere. But with recent advances in technology, how long before they disappear again? And will other blue collar jobs go with them?
As a video I posted on Wednesday shows, 3D printing is beginning to take off. No less than the mega office supplier Staples has announced that it will soon begin offering 3D printing services in some stores in Europe, and recent uploads to Youtube show it is possible to construct items as complicated as a gun using open source designs and a 3D printer. The technology is moving fast, and in its wake is a rapidly growing side industry of applications, tools, shops and designers. It is conceivable that we will all soon have access to 3D printers (whether at home or in shops), and will have the ability to design or download and “print” everyday items – photo frames, crocs, mugs, spare parts and even guns (etc.). But this capability to produce our own custom items at home will come at the expense of blue collar jobs. Why would Toyota need to operate a factory and a distribution chain (etc.) to produce spare parts for my car when they could just sell me the design for me to get it made in Staples? Why should the guy who sells the cover for my iPhone bother getting it made in China and shipped to me, when he could just sell me the design? Why would I bother buying the design for such a simple piece of plastic? What happens to the factory workers, the delivery drivers, and the people who work in warehouses?
It is undoubtedly that incredibly complex builds requiring specialist equipment and clean rooms etc. (like computers and cars) will continue to be produced in specialist factories with trained workers. But this is not true of many things. Many items around the house that used to be made or sold nearby, or used to be housed and transported by people living nearby, will soon no longer need to be made outside or transported. Soon many items will be created by our own little factories, and many of the blue collar jobs that are right now returning to our countries will be gone again. Once again the demand for white collar jobs will increase as technology makes blue collar jobs redundant. Of course we should be happy that companies are starting to reshore jobs, but those jobs will not be around forever.