Manufacturing Reshoring among Swedish Firms

Sammanfattning: Due to the global nature of business, the dispersion of international geographical activities has increased and location decision-making has become a critical strategic decision for companies. Recent research, on the other hand, has begun to report on an opposite movement. Pandemics, dramatic weather disasters, political conflict, and cyber-attacks are all examples of shocks that can disrupt global value chain-based manufacturing.  The reshoring of production is a hot topic in recent EU policy debates, both because of supply shortages due to the COVID-19 pandemic and because of geopolitical changes. Despite increasing attention to the manufacturing location, the lack of empirical studies on this phenomenon, especially to return activities to high-cost countries such as Sweden, is clearly visible. With a qualitative method, the purpose of this study is to create a deeper understanding of reshoring in the Swedish context. Focuses is mainly on the drivers and barriers, as well as a company's expectations of reshoring and their challenges to implementing the decision. Secondary data is in the form of literature review and related surveys to gain knowledge of the phenomenon. In addition, primary data were collected through semi-structured interviews with two Swedish manufacturing firms that decided to reshore. In this research, a deductive approach is used in which existing theories, mainly in the field of international business, are used to analyze empirical data. Secondary data cited labor costs in Sweden as one of the main offshore factors and the development of technologies such as automation, quality, and flexibility as reasons for the reshoring. In the primary data of this research, some other factors such as a focus on core competencies and using another country's experience/resources, as an offshore's reason besides social matters and having a sustainable strategy as a reshore's reasons were highlighted. Regarding expectation and challenges, awareness of problems such as decreasing company flexibility and increasing the lead time before offshore decisions by both companies, besides the perception of the challenges of implementing a reshore decision with an appropriate long-term plan to address them, reflects their comprehensive view of their strategic decision.