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Insourcing: Manufacturing Comes Back To America

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598524057 1

Though it seems counterintuitive, American manufacturing has been doing well, and many companies have begun insourcing.

An American shift

Over the last few decades, many American companies moved their jobs overseas. However, several manufacturers are now expanding their American operations, keeping their factories and production facilities in the U.S.

Foxconn Technology Group, a Taiwanese electronic manufacturing company, recently announced that they might bring 10,000 jobs to Wisconsin.

Foxconn is a contract company, meaning they make an array of electronic goods for companies such as Apple, Nintendo, and Sony. If Foxconn moves production to America, iPhones could be one of many products that become U.S.-based.

American automaker Ford also began shifting its production back to the United States. Earlier this year, Ford announced that it would no longer build a $1.6 billion Mexican assembly plant, opting to bring 700 jobs to Michigan instead.

But manufacturing never fully left

Though outsourcing has changed the landscape of manufacturing in the United States, many of the industries never left.

The United States’ manufacturing output has doubled since 1984, and though China is the leading manufacturing economy, the U.S. is in second place.

Gross output of U.S. manufacturing industries was $6.2 trillion in 2015, making it the largest sector in the American economy.

The problem was never that the industry left, it’s that the jobs left. Automation and technology changed the industry, so we make more things more efficiently using fewer workers.

Though President Donald Trump often calls to bring jobs back to America, many of these jobs never left America, they just became unnecessary. As Forbes put it, “robots take away far more jobs than Mexican or Chinese workers do.”

Takeaway

Though it is true that entrepreneurs and manufacturers recently have shifted toward manufacturing their products in the United States, the manufacturing industry was never really in danger. There may be fewer manufacturing jobs, but that’s because the manufacturing sector isn’t growing at the same pace as technology.

Outsourcing also has changed the manufacturing industry, but that doesn’t mean that outsourcing is a problem. Outsourcing and insourcing aren’t inherently good or bad for the United States, and both come with their benefits and downfalls.

Technology has disrupted many industries in the past (i.e. agriculture), but people always manage to find new jobs that require people. Industries expand and evolve, and both technology and outsourcing have become inevitable parts of our globalized economy.

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Header image: Getty Images

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