Backshoring of production in the context of a small and open Nordic economy

Abstract

Purpose The purpose of this paper is to investigate the extent, drivers, and conditions underlying backshoring in the Finnish manufacturing industry, comparing the results to the wider ongoing relocation of production in the international context. Design/methodology/approach The survey of 229 Finnish manufacturing firms reveals the background, drivers, and patterns of offshoring and backshoring. Findings Companies that had transferred their production back to Finland were more commonly in industries with relatively higher technology intensity and they were typically larger than the no-movement companies, and with a higher number of plants. They also reported more commonly having a corporate-wide strategy for guiding production location decisions. Research limitations/implications Backshoring activity in the small and open economy of Finland seems to be higher compared to earlier studies in larger countries. The findings suggest that there is a transformation in the manufacturing industries with some gradual replacement of labor-intensive and lower technology-intensive industries toward higher technology-intensive industries. Practical implications Moving production across national borders is one option in the strategies of firms to stay competitive. Companies must carefully consider the relevance of various decision-making drivers when determining strategies for their production networks. Social implications Manufacturing industries have traditionally been important for employment in the relatively small and open economies of the Nordic countries. From the social perspective, it is important to understand the ongoing transformation and its implications. Originality/value There are few empirical studies available of the ongoing backshoring movement, utilizing data from company decision makers instead of macroeconomic factors.

Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry

“…For instance articles based on German data (Dachs et al 2019a ; Kinkel 2014 ; Kinkel and Maloca 2009 ) show large companies are more likely to implement the relocation strategy under investigation. The higher propensity for large firms to back-shore, when compared to small and medium-sized enterprises (SMEs), has also been found in Scandinavian firms (Heikkilä et al 2018a , b ; Johansson and Olhager 2018a ). However, Canham and Hamilton ( 2013 ) showed New Zealand SMEs have a higher propensity to back-shore when compared to larger firms.…”

Principles of reshoring development in luxury goods sector1

“…The evidence of reshoring activities has multiplied over the past few years in the economic press and in white papers of consulting firms and the international organizations [e.g., The Economist, 2013; Sirkin et al, 2014;Cranfield University, 2015;De Backer et al, 2016]. A.T. Kearney, Inc., the BCG, the Reshoring Initiative, the European Parliament, the World Bank, the Organization for Economic Cooperation and Development (OECD), and the Reshoring Initiative [2016] survey reshoring motives and analyze reshoring activities and agree with the state of knowledge presented by academic researchers [e.g., Sirkin et al, 2014;Van den Bossche et al, 2015;Di Mauro et al, 2018;Heikkilä et al, 2018aHeikkilä et al, , 2018bJohansson et al, 2018;Stentoft et al, 2018].…”

Fuzzy-logic-based support tools for initial screening of manufacturing reshoring decisions

“…Cost and quality were assigned the highest importance, time, flexibility, and innovation medium importance and sustainability the lowest importance. The grouping is supported by recent empirical research on critical operations capabilities in a high cost environment (Sansone et al, 2017(Sansone et al, , 2020 as well as with existing reshoring research which often considers cost and quality as the primary drivers for reshoring to high-cost environments (Engstr€ om et al, 2018a, b;Heikkil€ a et al, 2018;Johansson and Olhager, 2018).…”