What is insourcing?
After decades of watching American companies take jobs to other countries, we're beginning to see entrepreneurs and manufactures make the decision to keep factories and production facilities here in the United States—or even bring jobs back to the U.S. from overseas.
How do we know this is happening?
For the past two years, the private sector has been hiring—to the tune of 3.2 million jobs. In 2011 alone, we saw private companies bring on almost 2 million new workers, more than in any year since 2005.
That's good news, even if we still have a lot of ground to make up. And if you dive into the numbers (like those compiled in this new White House report), you'll notice something interesting:
-Business investment is up, growing by 18 percent since the end of 2009;
-We're exporting more goods and services to the rest of the world. As of October, American exports totaled $2 trillion -- an increase of almost 32 percent above the level in 2009; and
Perhaps most importantly, the manufacturing sector is recovering faster than the rest of the economy. Through the course of the past two years, the economy has added 334,000 manufacturing job, and that's the strongest two-year period of manufacturing growth since the 1990s.
Each of those facts is evidence of a growing trend of insourcing.
What does insourcing look like?
In addition to the broad trends, we’ve seen a slew of concrete examples of insourcing. In recent months, large manufacturers like Ford and Caterpillar have announced large investments in U.S. facilities. In years past, these sorts of expansions have been aimed at facilities in México, China, or Japan.
We’ve seen the same thing with smaller manufacturers.
In 2010, KEEN, the footwear designer, opened a 15,000-square-foot facility to manufacture boots in Portland, Oregon—moving production from China to a location just five miles from its corporate headquarters. The company also makes bags in California and socks in North Carolina. After watching costs rise in its Chinese factories, Master Lock began bringing production back to Milwaukee—the same place where the company was founded in 1921.
And it’s not just manufacturers. Service firms ranging from customer support centers to software developers to engineers are deciding to invest in the U.S. for their operations. Even foreign-domiciled firms are making the decision to take advantage of American productivity and innovation. Siemens, for ...