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June 14, 2024

6 Ways Rural Areas Can Capitalize on the Reshoring Wave

Reshoring Manufacturing Revives Rural Job Growth and Economic Potential

The current reshoring trend, fueled by government incentives like the CHIPS Act, Inflation Reduction Act, and Infrastructure Investment and Jobs Act, presents a significant opportunity for economic revitalization and job growth in rural communities across America.

It’s imperative to note that Rural America is a diverse tapestry of communities, each with unique challenges and opportunities that defy one-size-fits-all approaches. According to the USDA Economic Research Service, racial and ethnic minorities comprised 22.8% of the rural population in 2018, highlighting the growing diversity often overlooked in national narratives. Between 1998 and 2020, Black workers experienced the loss of 646,500 good manufacturing jobs. This represents a 30.4% decline in total Black manufacturing employment.

America Knits opening ceremony in Swainsboro, GA

Companies like America Knits in tiny Swainsboro, Georgia are testing whether the United States can regain some of the manufacturing output it ceded in recent decades to China and other countries, according to The New York Times.

When visitors arrive at the office of America Knits, the first thing they see is a black-and-white photo depicting one of the many textile mills that once dotted the area, along with the workers who powered the local economy. The scene reflects the heyday — and potential — of making clothes in the rural South according to company co-founder Steve Hawkins.

Here are some key points on how rural areas can capitalize on this reshoring wave:

  1. Leveraging Cost Advantages

Rural regions offer lower operating costs compared to urban centers, making them attractive locations for reshoring manufacturers. With factors like affordable land, utilities, rural communities can position themselves as cost-competitive destinations to attract investment from companies looking to reshore operations.

  1. Developing Shovel-Ready Sites

Many rural towns have fallen behind in maintaining modern infrastructure like roadways, rail service, utilities, and shovel-ready industrial sites. By proactively investing in these areas through creative funding solutions like public-private partnerships and federal grants, rural leaders can enhance their communities’ readiness to accommodate complex manufacturing operations brought back from overseas.

  1. Upskilling the Workforce

Access to a skilled and sustainable labor pool is among the top considerations for companies evaluating reshoring locations. Enhancing vocational training programs, nurturing education-workplace partnerships, and implementing strategies to attract and retain the next generation of industrial workers with skills in areas like mechatronics, robotics, and logistics are effective ways to bridge the gap for the rural workforce.

  1. Tapping into Older Workers

Approximately 46 million people, or roughly 16% of the U.S. population, currently live in rural areas. Rural communities tend to be older than their urban counterparts – 20% of people who live in rural areas are age 65 years or older, compared to 16% in metro areas.

The reshoring trend also presents an opportunity to leverage the experience of older industrial workers who may have been displaced by previous offshoring waves. By offering targeted retraining programs and incentives, rural communities can tap into this valuable talent pool, providing companies with a seasoned workforce while creating economic opportunities for older residents.

  1. Improving Quality of Life
Land plot in aerial view, Top view land green field agriculture plant with pins, pin location icon for housing subdivision residential development owned sale rent buy or investment countryside suburbs
Reshoring presents a great opportunity for rural workers

Companies prioritize locating in communities that offer employees an exceptional living experience beyond just employment. Another way of making sure rural communities take advantage of opportunities presented is rural leaders  investing in placemaking initiatives that enhance livability factors like affordable housing, childcare, recreation, arts/culture, and overall community vibrancy to attract and retain the industrial workforce.

  1. Coordinating Efforts

Economic development organizations (EDOs) play a crucial role in coordinating comprehensive preparation efforts across rural regions. This includes conducting assessments, developing strategic growth plans, pursuing funding opportunities, and facilitating collaboration between the private sector, government, education, utilities, and residents to simultaneously address workforce, infrastructure, and placemaking needs.

Astonishing Facts About Manufacturing

  • According to the US Department of Defense, “every dollar spent in manufacturing results in an additional $2.79 added to the economy, making it the highest multiplier effect of any sector.”
  • While just 11% of the U.S. gross domestic product, manufacturing accounts for 35% of American productivity growth and 60% of exports
  • U.S. manufacturing is the main engine of innovation in the U.S., responsible for 55% of all patents and 70% of all research and development spending
  • Every manufacturing job spurs 7 to 12 new jobs in other related industries, helping to build and sustain the US economy

By proactively addressing these key areas, rural communities can position themselves as attractive destinations for reshoring manufacturers seeking to establish resilient domestic supply chains. The federal incentives driving this reshoring wave present a unique opportunity for rural economic revival and job creation for both young and older industrial workers.

This article is part of our series on rural workers. Also check out Juneteenth: Celebrating Freedom and Embracing Opportunities.

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