Northshoring: The future, implications, and limitations

Bdaily, as part of our Northshoring focus week, spoke to professor Ignazio Cabras, the head of the accounting and financial management department at Northumbria University, to gain some insight into the phenomena of Northshoring.

Q: What is Northshoring?

“With Northshoring, particularly in the UK, we define it as the process of shifting investment and productive processes from the south, London and the south east, usually recognised as the economic centre of this country, to the northern regions.”

Q: What are the limitations to Northshoring?

“There are limitations to Northshoring, of course. Not all companies can think about relocating their productive processes from one location to another. There are a variety of aspects to consider.

“For example, whether the areas are able to sustain the business, whether there is strong or robust enough infrastructure to sustain the business in its growth. Whether the workforce is able to sustain the business in different ways. Whether there is infrastructure that can support the supply chain.”

“So, a business located in a given area of the south, for example London, will need to consider all these aspects in order to make the decision to relocate.”

Q: Is Northshoring here to stay?

“When these companies decide to move there are strategic implications not only in the short but the long term. The problem is with a post pandemic economy, exacebrated by brexit, the market is very volatile.

“So, for example, there might be complications with government investment. We all hear about leveling up, the differences between the north and the south, but whether this really materialises? Its up to the company to see wether these opportunities arising continue to be there for the long run.

“I am very optimistic. When a company decides to relocate its does so for the long term. But of course, there are issues completely outisde a companies control, economic shocks, supply line shocks, government investment in other areas. These will leave companies exposed to rapid change in the future.”

Q: What is the future of Northshoring?

“I think at least in the short term Northshoring will continue in the next three, four years.”

“I wonder whether Northshoring will be supported by governmnet policies that will create the appropriate infrastructure and conditions for Northshoring to be sustained for the net five, ten, fifteen, twenty-five years?”

Read more of our Northshoring week coverage here.