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Production in the Innovation Economy$
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Richard M. Locke and Rachel L. Wellhausen

Print publication date: 2014

Print ISBN-13: 9780262019927

Published to MIT Press Scholarship Online: May 2014

DOI: 10.7551/mitpress/9780262019927.001.0001

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Innovation and Onshoring: The Case for Product Variety

Innovation and Onshoring: The Case for Product Variety

(p.211) 8 Innovation and Onshoring: The Case for Product Variety
Production in the Innovation Economy

Donald B. Rosenfield

The MIT Press

Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a number of reasons for locating production offshore. In addition, the author develops an analytic model of the total cost of a product and how various product characteristics might affect that cost. The model identifies innovativeness as a factor that supports onshoring as well as pointing out that product variety itself is a form of innovation. Three major factors foster onshoring: innovation in products and processes, a low ratio of value to weight, and a high variety of products.

Keywords:   Offshoring, Onshoring, Production costs, Product variety, Process innovation

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