Technology Manufacturing Gradually Shifts Back to the States

An important trend has been emerging in computer technology current events arena. American businesses, in the technology sector as well as a few others, are beginning to shift their manufacturing operations from China back to the United States. While the change was initially undertaken mostly by smaller businesses, some larger companies, such as Google and General Electric, have been following suit. Even more companies are determined to make the change within the next few years.

This change has been prompted by several reasons, all differing from company to company. Some have found it too difficult to routinely send employees across the world to monitor operations, which causes them to lose weeks of work and pay costly travel expenses. Rising costs of production in China (resulting from higher wages, growing transportation costs, and the Chinese yuan’s appreciation relative to the dollar) are reducing the cost difference between production in East Asia versus production in the US. Other producers have found that more secure and timely delivery as well as easier implementation of product revisions have made the shift well worth the trouble. Even if the whole operation isn’t relocated, more final assembly procedures are due to take place in the States.

Other companies from a range of industries will be watching the progress of these businesses closely. It was largely thought that most products could not be produced cost-efficiently in the US in today’s market, and despite the rise in price for overseas production, some are still wary of risking their futures on a sudden shift to American soil. However, together with the return of transportation goods and furniture, the changes currently in progress are predicted to create 2-3 million jobs in America as well as add $100 billion of output to the US economy by 2015, according to the Boston Consulting Group.

The change is predicted to make American exports more competitive, especially through Canada and Europe as US production is still significantly cheaper than most other places in the industrialized world. Companies looking to expand are now faced with a challenging decision of where to open their next production plants because the decisions they make now will affect them through the next few decades. In other words, companies aren’t acting on opportunities in the current market anymore, but on the future as well, so elements like cost of labor and transportation as well as availability of resources have to be estimated for both present and prospective markets.

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