The Paradigm Shift of Investment in Manufacturing Industry
The Paradigm Shift of Investment
Samjong KPMG considers the change in investment goal in the manufacturing industry and the selection of appropriate investment area carefully.
Re-shoring, which is the act of reintroducing domestic companies, who have relocated their production bases due to the rising labor cost in emerging economies, shortening product lifecycle and concerns on the outflow of intellectual property, is gaining interest in advanced countries such as the US. However, unconditional return of companies is hardly a rational strategy since the improvement of the domestic investment environment is being delayed. Now is the time when manufacturing companies need a new-shoring strategy aligned with the changes in overseas investment environment to decide whether they should maintain the status quo or return or relocate to a third party.