Reshoring, Open Source, Earned Security: Bet on These Trends in 2023
By Doug Milburn, president and co-founder of 45Drives Reshoring, the process of bringing back manufacturing jobs to the United States, has been a major trend in recent years across many sectors. The Covid-19 pandemic has exposed the vulnerabilities of global supply chains, and companies are now looking to reduce dependence on foreign suppliers. Cost advantages of offshoring are diminishing, and geopolitical risk exposure has increased dramatically. Done correctly, reshoring drops geopolitical risk, and also improves control over quality and delivery time. Look for companies that do so, while simultaneously reducing cost through productivity enhancing technology and automation. This is such a market force right now, that’s it’s my number one trend pick for retail investors to watch. According to a recent Forbes article , American manufacturing companies have ramped up construction of new factories this year, working especially hard at building semiconductor facilities but also erecting new factories for food and beverage processing, chemicals and plastics. Firms are also adding facilities nearby, such as in Mexico, in a move called “near-shoring.” While others are looking to locate in countries politically aligned with the U.S., called “friend-shoring.” The ramp up in reshoring by companies is just getting started, experts believe. CNBC reports that investors should keep an eye on companies that are reshoring as they are likely to benefit from this trend . The Reshoring Initiative is a non-profit organization that tracks data on the reshoring trend. According to their data, American manufacturing companies have been taking big steps to diversify their supply chains, focusing on reliability and robustness over cost and efficiency. That means bringing some manufacturing back home, or “reshoring” and moving some of it to other countries. Actionable advice here : Some of the major US companies that are reshoring like gangbusters and deserve your attention for it include Boeing Co., Whirlpool Corp., Ford Motor Co., General Motors, Lockheed Martin Corp., General Electric Co., Thermo Fisher Scientific Inc., and many more. These companies are taking advantage of government subsidies and incentives to bring back jobs to the US. Don’t sleep on them. Open Source The second major trend to guide retail is without a doubt the open source revolution. Open source software is software that is developed by a community of developers and made available to the public for free. It is often used as a way to create new software quickly and efficiently, and it has become increasingly popular in recent years. In my opinion, it’s absolutely the future of everything. According to a report by Red Hat, the open source development model is showing no signs of slowing down, and it has actually accelerated during the pandemic . The report found that 92% of IT leaders surveyed feel enterprise open source solutions are important to addressing their COVID-related challenges. This is not surprising, considering the moves many businesses made towards the open hybrid cloud even before the pandemic. Cloud computing and always-on services built using the open source development model and open source code are increasingly crucial to nearly every organization regardless of industry. Digital Ocean and Red Hat are two firms I’d bet on, as part of this open source groundswell centered around the world of the Linux operating system. Digital Ocean is a cloud infrastructure provider that offers a range of services based on open source software, while Red Hat is an enterprise software subsidiary of IBM. Look for companies that offer earned security, not participation trophies Lastly, I’m recommending companies that are willing to create a culture of earned security. This means clearly defining what each employee needs to do to contribute to the organization and making it crystal clear that those who become contributors are highly valued and safe, but conversely those who do not contribute don’t have a place and will not be around. Employees who are not meaningful contributors are rarely happy in their job, drag down morale, and this costs the company in terms of productivity, customer experience, and bottom line. Getting rid of those who don’t fit improves working life better for those who contribute. But it is also mission critical to create a sense of value and safety for those who remain. Doing this requires bold moves to dump corporate crutches such as seniority and ineffective performance evaluation, and sometimes radically trimming bloated staff–there is truth in the old saying that idle hands do the devil’s work. We’ve all been able to watch Elon Musk’s odyssey that began with a takeover of a very troubled twitter. […]
