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RSA: Manufacturing 'coming home'

Manufacturing could move back to the UK from far-flung corners of the world, potentially increasing the amount of material available for recycling, according to the RSA.

A report from the think tank, Making at home, owning abroad: a strategic outlook for the UK’s mid-sized manufacturers, argues that a combination of high oil prices, emissions regulations and rising labour costs in the Far East will encourage companies to manufacture goods at home that have been made elsewhere in recent years.

The key factor would be the increasing costs of shipping goods around the world negating savings from what have been lower production costs abroad.

But the RSA said there could be an “unintended environmental benefit” as increased recycling and regional trade broke the link between economic growth and a rise in seaborne exporting.

Increased local – rather than global – production would not be “directly driven by a desire to address sustainability issues [but] these changes may also significantly reduce emissions,” the report said.

“Products would travel shorter distances both in production and in delivery to customers.

“The design of products, by choice or by regulation, will take on board the circular economy concept increasing the levels of reuse and recycling. If well managed, both for companies and for countries, adaptation to this new context could both provide growth and address the imperatives of climate change – so called green growth.”

Medium sized companies – those larger than SMEs but smaller than multinationals – would be the best placed to benefit from this trend as they had work outsourced to Asia that could be brought home.

 

 

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