Georgia Tech study: State factories are increasing 'in-shoring'
By Walter C. JonesMorris News Service
ATLANTA – More Georgia factories transferred work in from other states and overseas than outsourced reversing a long-term trend, a recent report from Georgia Tech shows.
The report by Tech's Program in Science, Technology and Innovation Policy is based on the latest in a series of surveys in which factory executives give extensive details about their operations. The latest survey showed that about 16 percent of the firms brought into Georgia plants some aspect of their manufacturing while 14 percent of them were subject to outsourcing, mostly to other parts of the United States, Asia, Mexico and Central America.
"An increase in companies using more in-sourcing will benefit more Georgia businesses," the authors wrote. "These trends suggest a net increase in value added of the manufacturing sector in the state."
In-sourcing may benefit the state, but the survey data suggests that it didn't improve the companies' bottom line since there was no difference in profitability between those bringing in work and those transferring it out.
The new, in-sourcing trend is not uniform across the state. Firms in the Rome-Dalton area still shipped out more work than they brought into the state, and those in the Augusta region were the only ones that reported bringing no work in at all while 20 percent of them there exported work.
At the same time, Augusta-area firms invest the least in research and development per employee of eight regions that the authors divided the state into. They spent far less than the state and national average on R&D.
Firms in the Albany area spent the most per employee, followed by the Atlanta area and those along the coast. The geographic differences are likely tied to the distribution of industries since the transportation and science-related companies invested more in research, and those dealing with food, textiles and materials invested the least.
Overall, plants in Georgia are well below the national rate of research investment, but the authors speculate that is because most of the plants are headquartered in other states.
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Research and development investment per employee
Rome-Dalton-Cartersville ... $3,265
Athens-Gainesville ... $1,917
Atlanta ... $7,948
Columbus-LaGrange ... $4,895
Macon-Dublin ... $2,307
Augusta ... $1,683
Albany-Douglas ... $9,548
Savannah-Brunswick ... $5,262
Source: 2012 Georgia Manufacturing Survey by Georgia Institute of Technology
