The UK could see 378,000 jobs created over the next three years thanks to mid-market firms re-shoring some of their business, according to research from General Electric Capital and Warwick Business School.
Furthermore, executives of these businesses believe revenues could rise by 14.8 per cent - or £3.8m firm per annum, with an average up-lift in profits of 12.1 per cent. The report claims this would add £27.6bn to national mid-market revenues annually.
Ilaria del Beato, chief executive of GE Capital UK, commented:
The synergies created by bringing back previously outsourced services to the UK, and closer to London, drive the predicted increase in revenues and will make a positive contribution to a stronger economy. In addition, the re-shoring of these activities will offer greater opportunities for existing and future workforces across the UK.
Greater London is set to be the biggest winner from the potential re-shoring bonanza. 41 per cent of the firms who said they are considering relocating some of their business are based in London, with another 35 per cent of mid-market businesses anticipating this activity to be directed to Britain's booming capital.
Professor Stephen Roper of Warwick Business School commented:
Historically re-shoring activity has focused on regions outside London, yet our research indicates that mid-market firms see the value of being active in the capital, despite the high costs associated with doing business here.
GE expects the other big winners from this re-shoring would be the South East, the West Midlands and the North West and Yorkshire & Humber.
GE's research found the most important factors when deciding whether to re-shore were:
- Management or control issues
- Advantageous business culture
- Rising operational costs overseas
- Access to skilled labour
The report is more optimistic than research from the Confederation of British Industry released back in March, which found UK businesses were lagging well behind other major EU economies on intentions to re-shore jobs.
Only 30 per cent of the UK business leaders polled said they had re-shored operations in the past three years. That number was below the EU average of 32 per cent, and well below France and Germany’s 40 and 50 per cent respectively.
In January, David Cameron told the World Economics Forum in Davos he wanted Britain to become a "re-shore nation."