Backshoring of production in the context of a small and open Nordic economy
Journal of Manufacturing Technology Management
ISSN: 1741-038X
Article publication date: 4 January 2018
Issue publication date: 23 May 2018
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.
Keywords
Acknowledgements
This research was conducted in collaboration with Professors Jan Olhager from the Lund University in Sweden and Jan Stentoft from the University of Southern Denmark. The research was part of the Innovation research program “Renewal of Manufacturing” jointly financed by Tekes – the Finnish Funding Agency for Innovation and the Swedish innovation agency VINNOVA. The authors acknowledge the financial support for this research, and the Nordic research partners for the fruitful cooperation.
Citation
Heikkilä, J., Martinsuo, M. and Nenonen, S. (2018), "Backshoring of production in the context of a small and open Nordic economy", Journal of Manufacturing Technology Management, Vol. 29 No. 4, pp. 658-675. https://doi.org/10.1108/JMTM-12-2016-0178
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited