2019
DOI: 10.1016/j.jwb.2019.101017
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Bringing it all back home? Backshoring of manufacturing activities and the adoption of Industry 4.0 technologies

Abstract: We investigate the relationship between backshoring of production activities and digital manufacturing technologies, also known as Industry 4.0 (I4.0). We argue that I4.0 supports backshoring because it provides a higher productivity and flexibility which offers an incentive for firms to locate production close to their European customers.The empirical test is based on a large dataset of more than 2,000 manufacturing firms. Backshoring is still a rare event with a share of no more than 4% of all firms. Descrip… Show more

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Cited by 183 publications
(181 citation statements)
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References 79 publications
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“…A persistent divide in 'access' and 'use' of digital technologies is likely to increase risks of exclusion of developing country firms from GVCs. As the cost of capital falls in developed countries, there is likely to be an increase in reshoring of manufacturing value-added, as well as limited future offshoring to developing countries (Banga and te Velde 2018a; Dachs et al 2017;Rodrik 2018). The increase in 'on-demand' production brought forward by 3D printing and digital machinery is expected to further bring production closer to the end-markets, shortening the GVCs (De Backer and Flaig 2017).…”
Section: Introductionmentioning
confidence: 99%
“…A persistent divide in 'access' and 'use' of digital technologies is likely to increase risks of exclusion of developing country firms from GVCs. As the cost of capital falls in developed countries, there is likely to be an increase in reshoring of manufacturing value-added, as well as limited future offshoring to developing countries (Banga and te Velde 2018a; Dachs et al 2017;Rodrik 2018). The increase in 'on-demand' production brought forward by 3D printing and digital machinery is expected to further bring production closer to the end-markets, shortening the GVCs (De Backer and Flaig 2017).…”
Section: Introductionmentioning
confidence: 99%
“…Dachs et al explore the relationship between support of manufacturing activities and technologies for digital production as part of Industry 4.0. They claim that it supports back shoring, because it provides higher productivity and flexibility [11]. Zhang et al on the other hand present an architecture of the use of ubiquitous robotic systems based in the cloud for intelligent production of an adapted product.…”
Section: Resultsmentioning
confidence: 99%
“…Additionally, the reduction of jobs needed in production contributes to the decrease of total salary costs, and the production previously relocated in the low-wage countries might settle down in Europe again. The efficiency, quality control opportunities, and reliability of manufacturing, as well as quick delivery associated with mass customization can intensify the backshoring decisions of businesses [70,71]. Consequently, it can bring new jobs composed of non-substitutable tasks and increase the demand for building land for industry and commerce.…”
Section: Increase Of New Occupational Tasks and Activities Businessmentioning
confidence: 99%
“…The access to knowledge and professional experience is thus also expanded and enables gaining new qualifications that correspond with the demands of the changing labour market. Furthermore, the improved location attractiveness can encourage the companies to go back or settle new business locations in the rural areas [70,80]. Decentralised production and service provision contribute to reduction of spatial disparities.…”
mentioning
confidence: 99%