1. Localised manufacturing
Is this the path to sustainable
development?

2. Globalisation
1970s / 1980s / 1990s /
1950s / 60s
80s 90s 2000s
Post war recovery
Growth of conglomerates
Privatisation of national assets
Outsourcing / down sizing
Off-shoring
• 2000 – 2009: 5 five fold increase in Chinese exports
• 3.9% to 9.7% of the global export market
• Shipping containers lined up reach 1/3rd way to the moon
Real political and social benefits from global wealth distribution

3. We have reached another watershed
- we are living in unprecedented times.
• Longest and deepest financial crisis of a generation
• Threat of man made climate change
• Record number of people on the planet
• Drive for ethical purchasing
Public increasingly recognise the need for sustainable development
Climate change
Social
accountability Economic Food
polarisation shortage
Ecological
imbalance
Social
imbalance Energy security
Water shortage
Poverty

4. The balance is changing
Offshoring Localised manufacture
Low cost skilled labour Quality perception
Low cost shipping Cultural challenges
Availability of resources Lead times
Chasing growth markets Supply chain stock
Availability of skills

5. The balance is changing
Offshoring Localised manufacture
Low cost skilled labour Labour cost inflation (China >20%)
Low cost shipping Transportation / oil price inflation
Availability of resources Local job creation
Chasing the growing markets Rebalancing import / exports
Availability of skills Rebalancing service / manufacturing
Currency depreciation
Ethical behaviours impact brand value
Need supply chain responsiveness
Climate change

6. Early signs
• Since 2010, US has grown 300,000 manufacturing jobs
– First growth since 1990s
• 37% of large US manufacturers either planning or actively
considering bringing back production (BCG survey, 2012)
• With shipping cost inflation of 5% pa and wage inflation at 30%
pa, by 2015 it will be just as cheap to manufacture in North
America for local deliveries as in China (Economist, 2012)
• Job creation prime political issue
Global economic crisis is driving new behaviours

7. What is localised manufacturing
Rebalancing of centralised / local production
Industry and application
dependant
Economy of scale Local responsiveness
Centralised skills Local jobs in response to local demand
Reduced financial risk

8. The debate
• Is this trend a good thing for sustainable development?
• How can policy makers create the environment to support?
• What do businesses need to do to capture the benefits?
• What do we all need to do to promote this change?