Consultants EY estimates the UK could add GBP15.3bn (US$23.4bn) to its economy and create more than 315,000 jobs if previously ooutsourced work is repatriated to Britain.
In its ‘Reshoring – Time to Seize the Opportunity’ report, EY calculates the benefits across a ten-year period to 2025, with specific regions such as the north west and the south east outside London being boosted the most to the tune of GBP2.4bn and GBP2bn respectively.
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“Offshoring in the 1980s and 1990s saw a dramatic reduction in British manufacturing and a shift to services industries that resulted in a fundamental restructuring of the British economy,” said EY chief economist and report author, Mark Gregory.
“While some regions saw rapid growth and wealth creation, others suffered from high rates of unemployment. But the economics underpinning this trend appear to be reversing and presents the UK with a once-in-a-generation opportunity.
“While increasing wages in developing countries are eroding their labour cost advantage, there are many more factors driving business to choose British shores.
“The desire to guarantee quality and the imperative to reduce time to market are increasingly important drivers of location decisions.”
EY estimates aerospace, defence and automotive industries would see the biggest benefit from reshoring.
