Report: Heartland region poised for industrial resurgence as firms consider reshoring

A new report Wednesday (Feb. 3) from Bentonville think tank Heartland Forward highlights the need for a bipartisan strategy to bring manufacturers back to the U.S.

The new research, “Reshoring America: Can the Heartland Lead the Way?,” says the nation’s Heartland region can play a significant role in the country’s industrial comeback driven by reshoring, the return of manufacturing centers to the U.S. from abroad.

The report notes growing bipartisan support for policies that bring foreign businesses home. The Biden administration promotes domestic manufacturing, and Congress has grappled with the country’s dependence upon Chinese-made personal protective equipment (PPE) during the pandemic.

The report says 70% of firms say they will likely reshore in the coming years, according to a 2020 survey. For the U.S. to reclaim its manufacturing prowess, Heartland Forward researchers call on policymakers to embrace a holistic reshoring strategy.

Joel Kotkin, senior fellow of Heartland Forward, is the report’s principal author.

“Decades after the U.S. lost its position as the world leader in manufacturing, the country could make a comeback if lawmakers from both parties work together to shift the focus of our trade and industrial policies toward reshoring,” Kotkin said.

While PPE shortages in the early stages of the pandemic brought attention to the dire need to bring medical manufacturing capacity home, the report stresses that reshoring is a long-term priority. The authors survey the economic evidence and find that firms increasingly need secure supply chains, easier access to key markets and a more talented, educated workforce.

Heartland states offer these advantages and more, consistently ranking among the nation’s most business-friendly. Six of the top 11 engineering schools are based in the Heartland, and the region offers ready access to raw materials, lower costs of doing business and shorter supply chains.

“Over the past decade, we’ve seen the rate of job creation due to reshoring accelerate dramatically,” said David Shideler, chief economist at Heartland Forward and a co-author of the report. “Still, there must be a bipartisan effort to sustain this progress, and it must go beyond narrow measures like tariffs or bans. Investments in physical infrastructure and education, loans, grants and tax incentives for investors would all go a long way toward promoting reshoring.”

Heartland Forward notes that, before the onset of the pandemic, the annual rate of job creation due to reshoring accelerated from 6,000 in 2010, to over 400,000 in 2019. The full report can be found here.

Heartland Forward is the first U.S. think tank focused entirely on the economic situation of the Heartland region. It is spearheaded by Walton family members and led by president and CEO Ross DeVol, a former Walton Fellow and Milken Institute chief research officer.

Heartland Forward uses the U.S. Census regions of East North Central, West North Central, East South Central, and West South Central to define the Heartland. These regions cover the 20 states in the middle of the country: Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas and Wisconsin.