Editorial: Reversing the Trend

Before his inauguration, the US Presidentelect Donald Trump was ecstatic. Wireless carrier Sprint had just announced that it would be bringing thousands of jobs back to the United States.

I was just called by the head people at Sprint and they are going to be bringing 5,000 jobs back to the United States. They are taking them from other countries.

Trump told reporters outside his Mar-a-Lago estate in Florida.

If only it were that easy. Just hours later, the Global Times, a top Chinese newspaper which is officially backed by the Communist Party, published an analysis piece that says.

It will be almost impossible for the [US] to restore its glory as a major manufacturing powerhouse under his presidency.

So who’s right? And can politics strong-arm business to reverse the decades-long trend to offshore jobs, lured by the promise of dirt-cheap labor at the ‘extended workbenches,’ especially in Southeast Asia? Hardly. What is happening instead is that a mix of new technologies, including IoT, automation, mass customization, big data, and global networks are rapidly coming together to create a kind of ‘perfect storm’ in which these recursive trends reinforce each other, and in the process, radically change the way we make stuff. Trump may get his wish, but not just for reasons of patriotism. Flexibility and the ability to react quickly to changing customer needs and demands weigh much stronger today than shaving a few bucks off the payroll.

Instead of favoring the vendors, the playing feld is tilting towards the customer, causing a fundamental power shift. Businesses today ignore their customers at their peril. Squeezing every ounce of advantage out of technology in general and IoT in particular is about the only way businesses today can create an edge – but even more important will be listening to your customer.

As Avnet’s John Jones argues in his column on page 70 of this issue, it makes sense to start gathering data now and thinking about the possible business case later. The price of sensors, storage and transmission of data has fallen so low that collecting data no longer really needs an ROI – just do it!

Automation and mass customization, combined with advances in artificial intelligence will almost certainly have an enormous effect on labor markets. Industries will be looking very carefully indeed at their offshore outsourcing commitments and there are signs that ‘reshoring’ – bringing the work back home – is becoming more attractive in Europe and America.

But, while economics will always remain a crucial factor, businesses need to focus even more on their customers and their needs and demands.
Here, once again, reshoring appears to be the best way to go. In this age of customer empowerment, consumers have unlimited choice, a worldwide market and, above all, as much information about products and services as the company that offers them cares to offer. Being able to make and keep the customer happy is becoming more crucial than ever.

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