What is {term}? No Shoring

No shoring refers to situations where companies bring business functions back to their home jurisdictions only to automate them rather than create jobs. No shoring is related to offshoring and reshoring because the tasks previously offshored are onshored once again. However, in the case of no shoring, no new jobs are produced. No shoring occurs when the benefits of automating the production functions exceed those of offshoring; for example, when automation would cost less than offshoring or increase efficiency in the long run.

BREAKING DOWN No Shoring

Many companies offshore certain tasks to take advantage of lower labor costs in other countries. Some of these tasks have been reshored due to quality control reasons or political risk, and the result has been the creation of domestic jobs. In some cases, however, when companies reshore, jobs are simply replaced by automation; jobs once occupied by people are carried out by robots and new technology. Hence, the term "no shoring." The cost of a robot or a software solution that automates a task are similar regardless of locale, so companies often choose to locate these operations closer to home for easier access to the end market.

Industries Impacted by No Shoring

As the sophistication of software and robotics increases through techniques such as deep learning, the type of tasks at risk of being replaced by automation are increasing. For example, voice recognition software and natural language processing (NLP) capabilities can replace human agents in call centers. Call centers that once were offshored in droves have now been no shored. Basic call inquiries are managed by machines, and a lower volume of unique calls are handled by human agents. This provides savings for the company but a net loss of jobs to automation.

Many other office support, logistics, and sales functions are transitioning from offshoring to no shoring. The same factors that make a task vulnerable to offshoring make those same tasks vulnerable to no shoring. Is it a repetitive task such as data entry or analysis? Can the task be broken down into simple steps? If the answer is yes, then software or robots that can automate those tasks are most likely under development or already available.

Offshoring receives more attention than no shoring because the general public is more concerned with job losses from offshoring compared to a loss of jobs due to technology. However, according to the Financial Times, between 2000 and 2010, the job losses in the U.S. manufacturing sector of over 5 million were largely due to automation rather than offshoring. Some of these jobs were never offshored and did not qualify as no shoring.