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A quarter of mid-market firms are considering re-shoring some, if not all, of internationally outsourced business activities back to the UK – a trend expected to create 378,000 jobs over the next three years and generate revenue of £83bn.
This is according to research conducted by GE Capital and the Warwick Business School.
Access to skilled labour was in the top five reasons firms cited for wanting to bring activity back to the UK. The other reasons were: management or control issues, advantageous business culture, productivity and rising operational costs overseas.
The findings also showed that Greater London is the top destination for re-shoring, with 41% of businesses surveyed considering relocating business activity to London. Other regions most likely to be effected by re-shoring are the South-East (17%), the West Midlands (13%), the North-West (11%) and Yorkshire & Humber (10%).
However, in a press statement Stephen Roper, professor of enterprise at the Warwick Business School, said the current re-shoring trend “may exacerbate the growing disparity between the London economy and the rest of the UK”.
It was also found that as a result of re-shoring the executives of mid-market firms expect see revenues increase by 14.8%, which is equivalent to £3.8m per firm per annum. Cumulatively, this would add £27.6bn to national mid-market revenues annually.
Geographically, activities ear-marked for re-shoring are predominantly located within the Eurozone. Almost three quarters (73%) of manufacturing and production activity that is being relocated by mid-market firms is set to come from Eurozone or broader EMEA markets. This said, a relatively high percentage of mid-market firms are set to relocate activity from Asia-Pacific for external/customer-facing business services (28%) and internal business services (28%)