Near-shoring and SMEs: Benefits and costs

January 12, 2024

Business investment is being rocked by a new movement. Proof is pouring in that near-shoring is taking the world by storm. That is, as far as we can tell at this point.

This wave is so new that it’s going to take time for the data to catch up to the trend. And of all the economy’s big numbers, investment data is notoriously hard to quickly pin down. We have to rely on anecdotes, and these – Honda’s reported consideration of Canada for a $13.8-billion electric vehicle project is just the latest – are yelling out pretty loudly that something big is afoot. So what does it imply for small and medium-sized enterprises (SMEs)?

One of the key reasons for this massive change of mindset is supply-chain security. We vowed we’d bring our supply chains closer after SARS, after tsunamis, after the global financial and economic crisis and never really followed through. These events sowed the seeds, however, and the COVID-19 pandemic pushed us over the edge. Supply chains became so compromised for so long – we are still absorbing the fallout – that we’d had enough. Now, near-shoring is really happening.