Caterpillar is bringing jobs and manufacturing back from Japan. Ford is investing in and adding hundreds of jobs at an engine factory in Ohio. And, as the President said in his State of the Union address, Apple will start making Macs in America again. These decisions build on the momentum we are seeing in American manufacturing, which has added over half a million U.S. jobs in the last 37 months, the most of any such period since 1986. According to the Boston Consulting Group, on-shoring of U.S. manufacturing is likely to continue as companies recognize higher U.S. worker productivity, increasing labor costs abroad, and other logistical advantages of U.S.-based production.
So what can government and the private sector do to further fuel this trend? And how can we strengthen what Gary Pisano and Willy Shih, of Harvard Business School, refer to as “the commons” – the local business environments where manufacturers draw their resources, their workforce and where they connect to local suppliers?
Strengthen America’s Supply Chains
Harvard Business School’s Michael Porter and Jan Rivkin noted in FORTUNE that “companies find huge advantages with excellent, nearby suppliers – low logistical costs, rapid problem solving and easier joint innovation.” To strengthen America’s supply chains, the U.S. Small Business Administration (SBA) has launched an Administration-wide initiative called the American Supplier Initiative.