Blog: You, us, everyone

According to research conducted by Morgan Stanley, bringing manufacturing back to Developed Markets is a +$15, trillion opportunity for Europe and the United States.

Solely for the US economy, the value of the estimated investments and related benefits could add a whopping $10 trillion. This will occur through industrial and production site developments which stagnated for about the last 25 years. Reshoring is to benefit particular IIoT and automation and robotics which drive higher efficiency ratios required by the industry.

The developed market economies could unlock trillions in value over the next decade if more manufacturing activity comes back to native countries and close to where consumers are. The perfect examples of “helped” manufacturing reshoring are Spain and Portugal. In the follow-up of the Euro crisis from 2011 to 2013, it became clear that these countries were left with almost no active industries. Part of the European subsidies aimed at reshoring industries that left and today, after more than 10 years of continued efforts, these two countries show a positive GDP growth, better than France and temporarily better than Germany which is suffering from its dependency of Russian Gas and the downturn in EV sales.

The cases of Spain and Portugal are key examples where domestic production continues to scale. Ultimately, shorter lead time benefits consumers and companies alike – Inditex being the front-runner in the textile industry showcases what consumers want and can afford. In essence, the entire supply chains need to be rebuilt.

We believe developed markets are entering the early turn of re-industrialization — a multi-decade opportunity that can generate an addressable market of over $ 15 trillion of investments covering technology, advanced manufacturing facilities, pharmaceuticals, semiconductors, artificial intelligence, and new trends in IIoT with a focus on robotics and automation. Traditional industrial firms — like those in the auto and aerospace sectors — and companies that invest in more sustainable manufacturing are also expected to benefit from the reshoring shift as the incoming tide will lift everything.

The cumulative effects could be profound across developed markets with the boost to industry and manufacturing bound to raise GDP. Reshoring could also potentially undo the trade deficit with developing economies.