An exploratory study on the interplay between manufacturing backshoring and sustainability: which benefits for innovation?

Purpose: The study aims at exploring the role played by sustainability in relocations to the home country and the effect this relationship generates on innovation. Design/methodology/approach; After decades of offshoring strategies, some manufacturing companies have started to revise their initial location strategy, implementing the so-called “relocations of second degree (RSD)” (Barbieri et al., 2019). In particular, the topic of relocations to home country (also called as backshoring or back-reshoring) has increasingly attracted attention by scholars in the last years (Barbieri et al., 2018; Stentoft et al., 2016). Even though decisions regarding where products are manufactured have a tremendous impact on a firm’s sustainability, scholars have rarely paid attention to the link between these two constructs. Recently, Fratocchi and Di Stefano (2019) conducted an extensive literature review and found environmental sustainability may have three different roles in the backshoring decision making process: a) driver, b) outcome and/or c) barrier. However, this relationship has not been investigated empirically. Moreover, given the compelling need for innovation triggered by a sustainable orientation identified in the literature (Hansen et al., 2009), we expect this link to benefit the innovation-related capabilities of manufacturing companies. The proposed paper – which has an explorative aim – is based on a multiple-case study approach. By relying on primary and secondary sources, we develop five original case studies of companies based in Italy, the UK and Sweden. Findings: Preliminary findings show that although sustainability is seldom the main driver for backshoring, it plays a plurality of roles. Sustainability was either one of the considered drivers in the decision-making or an outcome resulting from the relocation or, in most cases, both. Furthermore, to synergistically implement the backshoring decision and reach sustainable development, all the studied companies had to implement different kinds of innovation. Practical implications: The article provides practical implications for manufacturing companies that, due to the continuously increasing interest in sustainability, might reconsider their location decisions. These companies should know that their innovation capabilities will benefit from the synergies arising between backshoring and sustainability. Relevance/contribution: This research represents one of the first attempts to empirically validate the hypothesis that sustainability plays a role in relocations to the home country and to build a conjunct business case through the beneficial effects generated on innovation. This, in turn, opens a future avenue for further investigation in this field.