Arena Blog

How has outsourcing changed manufacturing?

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It’s no surprise that outsourcing has changed the global manufacturing landscape over the last several decades, for better or worse. Outsourcing allows manufacturers to competitively price and scale up and down quicker, but with the diminishing number of manufacturing jobs in the U.S., it has become controversial in some circles.

One lesser-known consequence of outsourcing has been called the “outsourcing-induced job vacuum”—(based on the idea that no product is an island.) A fascinating New York Times animated video summarizes the concept like this—as assembly jobs move overseas, technical jobs such as design and engineering do too.

The infographic below shows how the top employers in the U.S. economy have shifted toward a service-based model. Take Apple for instance. While the company is worth more than some of the biggest oil, energy and manufacturing companies, it only employs 43,000 Americans. (In contrast with General Motors, which employed over 400,000 American workers half a century ago.)

Resources for businesses interested in onshoring

For many businesses, outsourcing overseas is still a necessary reality. However, if you are considering moving your manufacturing back to the U.S., here are a few resources that can help get you started.

SelectUSA is a website that maintains a database of current federal programs and incentives available for U.S. businesses, as well as testimonials from companies who have successfully kept operations at home. The website even breaks down resources by specific industry so businesses can get tailored information.

The Manufacturing Extension Partnership specializes in helping small and mid-sized U.S. manufacturers create and retain jobs, increase profits and become more efficient. The program, which is a branch of the U.S. Chamber of Commerce, has over 1,300 technical advisers in every state that help solve manufacturers’ challenges and identify areas for growth.