It’s good to be home: Reshoring in New York leads to greater innovation and faster growth - by Akram Khalis

The New York manufacturing sector is booming, boasting one of the largest semiconductor manufacturing industries in the nation. Governor Kathy Hochul made headlines when she signed New York’s landmark Green CHIPS legislation in August 2022 to attract top chip manufacturers. Hochul has said she intends to continue supporting the sector as a priority for the state’s investment in the future.

New York is also leading the nation in reshoring manufacturing jobs back from overseas. Since 2021, the state has returned more than 13,000 sector jobs by creating an ecosystem where firms can innovate and grow.

So, I’ll say it again — the New York manufacturing sector is booming. 

Companies, like my own, which chose to leave manufacturing facilities in the U.S. for foreign opportunities did so to keep the cost of materials and labor down. At the time, the decision made good economic sense. Times have changed.

Considering the current shifting market dynamics, including rising tariffs and import duties, not to mention new U.S. tax incentives for technology-infused and green manufacturing, the tables have clearly turned. Today, reshoring may be one of the most impactful ways to cut expenses for a manufacturing business, reprising latent innovation initiatives and kickstarting entirely new ones.

Four motivating factors to reshore

For our firm, and doubtless many others in the city, four key factors make reshoring an intelligent innovation strategy.

1. Government tax incentives

The federal government has passed legislation in the Inflation Reduction Act, Infrastructure Bill and CHIPS Act that supports the development of the U.S. manufacturing and technology sectors in new and sustainably-focused ways. Tax-funded incentives help companies overcome steep relocation and startup costs, including building new green facilities and hiring skilled workers.

2. Reduced supply chain risks 

As an innovator delivering specialized products and solutions in a relatively new sector, our company must be able to deliver on promises. Anytime an Internet of Things (IoT), artificial intelligence (AI), or smart device firm lets its customers down, the halo effect decelerates the industries’ collective progress toward exciting outcomes. International supply chains increase the risk of disappointing customers because they lack consistency in quality, production, delivery and cost. When a never-before-seen product hits the market, you simply can’t afford a negative supply chain experience — it could sink the whole deal.

3. Access to a highly skilled workforce 

Manufacturers are focused on three areas this year: integrating intelligent technologies into operations for greater efficiency, reducing their carbon footprints and optimizing employee resources. Hiring a skilled workforce will be necessary to drive innovation and accelerate adaptive learning processes, like AI and machine learning. New production methods are likely to leverage IoT and other smart factory technologies to produce products more efficiently and sustainably. These investments will also provide access to more reliable data for making informed business decisions, enabling company growth. 

4. Closer proximity to customers

Reshoring allows a manufacturer to place even more business emphasis on customer satisfaction. Companies can improve customer sentiment by delivering products to on-demand warehouses faster. Reshoring allows manufacturers to shorten lead times, scale back on freight and shipping expenses and monitor quality more closely. Since reshoring our company this year, we have achieved a 70% reduction in delivery times. With faster speeds to market, lower expenses and higher quality output, we expect to see a surge in orders in the future.

It’s good to be home.

New York’s reshoring isn’t just a return; it’s a leap forward in innovation, growth and competitive advantage. As a member of the U.S. smart-building community, our firm is eager to contribute to the reshoring renaissance of American manufacturing. Instead of considering the opportunity as ‘cost prohibitive,’ we viewed it as ‘competitively advantageous’ for the reasons mentioned above. The U.S. appears to be the accelerator for the intelligent building marketplace, a place where our technology company can invest in innovation and thrive. It’s good to be home.

Akram Khalis is CEO of MHT Technologies and the co-founder of Inspextor, Manhattan, N.Y.