Reshoring Hard Tech: The Factory Is Only the Beginning
This 2022 perspective examines why rebuilding manufacturing requires more than a relocation decision. Its relevance lies in assessing industrial economics alongside technology; policy and market examples are historical.
Originally published in Global Corporate Venturing (GCV)
Read Min Zhou’s original GCV article ↗
A factory depends on an industrial ecosystem
The original article questions how quickly hard-tech manufacturing could return to the US and Europe. Production relies on suppliers, equipment, skilled people and infrastructure developed over time. Recreating those relationships requires capital as well as patience.
Manufacturing economics shape investability
Long construction and production ramp-up periods can be difficult to reconcile with venture funding. Labor and energy costs, financing availability and the time to commercial revenue all influence whether an innovative product can compete.
Assess the business behind the policy ambition
The investment lesson is to examine the economics of a proposed manufacturing route rather than assume that a relocation objective creates an attractive business. The article’s cases illustrate this assessment as it stood in December 2022.