Tampere University of Technology. Industrial and Information Management
Abstract
Manufacturing industries have had an important role in the export-driven economies of the Nordic countries. Manufacturing companies from these countries have increasingly been moving production abroad in recent years. However, backshoring of previously offshored manufacturing is attracting growing attention among researchers and policy-makers. This phenomenon, and its consequences for the renewal of manufacturing, are yet little understood. The research project “Reshoring of manufacturing (ROaMING): Disruptive Technologies, Business Ecosystems and Performance Information as Key Enablers” focused on increased understanding of production relocation trends in the Nordic countries, Denmark, Finland, and Sweden. The aim was to create in-depth knowledge on the status of and potential for relocating manufacturing as a source of renewal of the manufacturing sector. The research approach consisted of quantitative and qualitative parts utilizing both available databases and new data collected through a large-scale survey and case research. The report consists of five main content chapters. First, the survey results of offshoring and backshoring trends in the Nordic countries Denmark, Finland, and Sweden are presented. Then we discuss the use of financial information in decision-making regarding manufacturing offshoring and backshoring. Thereafter the results of a study on manufacturing innovations and the adoption and implementation of new manufacturing technologies are reported. The fourth chapter presents the results of a study involving two manufacturing companies on the role of business ecosystems in manufacturing relocation decisions. Finally, the fifth chapter explores the global production investments made during the period 2005-2015 by large manufacturing firms with headquarters in Denmark, Finland, and Sweden. The results among the Nordic manufacturing firms indicate that offshoring is clearly more common than backshoring. The manufacturing relocations by Nordic firms are geographically wide-ranging. The most important regions for offshoring and of backshoring are Eastern and Western Europe, the Nordic countries, and China. Offshored production is typically cost focused, whereas production relocated to the Nordic countries is relatively complex and technology-intensive, seeking access to technology, skills and knowledge, and proximity to R&D and product development. Movement of production is expected to continue both offshore and back. The reinforcement of the Nordic countries as a strong base for high value-adding manufacturing firms can be influenced by policy measures and future research. Policy implications, as well as future research proposals are noted as the result of this study. Cost competitiveness in the Nordic countries needs to be ensured in relation to their reference group in the competition. This also exerts pressure for continuous productivity improvements through technological advances and process improvements. Access to skills, knowledge and technology are important factors for Nordic manufacturers to relocate production. Therefore product, process and supply chain innovation, as well as colocation of R&D and production, need to be promoted. Policy-makers need to pay attention to maintaining the Nordic innovation systems. Many firms seem to lack a clear strategy or analytical capabilities for manufacturing location decisions. Expertise on managing global manufacturing networks should be enhanced. Follow-up on the extent, drivers and benefits of production relocations of the Nordic manufacturing firms is needed to enhance the fact-based understanding of the longer-term trend of manufacturing relocations.publishedVersio
