Rick Weddle: Welcome to Site Selection Matters, where we take a closer look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to the top leaders in the world of corporate site selection and economic development. We speak with the members of the guild, our economic development partners, and corporate decision-makers to provide you with deep insight into the best and next practices in our profession. In this episode, we have as our guest, Elias van Herwaarden, principal with Locationperspectives. In this capacity, Elias assists companies in building and restructuring their business internationally. This includes a wide range of services and location selection, footprint optimization, and glocalization, or helping companies successfully adapt their products and services to local markets. Today, Elias will talk with us about the COVID-19 pandemic, and how it may actually be redrawing Europe’s borders. Join me as we welcome Elias van Herwaarden to Site Selection Matters. Elias, the COVID-19 pandemic has underlined the importance of how and where companies produce their goods and services. Certainly, this has contributed to this ongoing debate we hear about reshoring or as some would say, rightshoring. Could you take a minute or two and explain just what reshoring is and maybe what it means in a European context?

Elias van Herwaarden: Thank you very much Rick for that question. I think the answer to that question depends on who you ask. If you would ask the French government, they actually understand it as bringing the jobs or the work back to France. If you would ask the Bulgarian Prime Minister, he will say reshoring is, well, bringing it back from Asia and bring it to Europe and, by the way, as you do that, bring it to my country. So, it’s a political perception, which I think if you talk to business people, you’re getting a different answer because for them reshoring is about shoring closer to market or closer to certain suppliers and providers. So, there’s a difference between the two. But companies are more thinking about rightshoring, rethinking their structures, then they’re literally taking the word reshoring for moving back to their country of origin.

Rick: Okay. Well, let me ask you this, with that different perspective, now, let’s take it from the company’s perspective, does it always work? Is it functionally the right thing to do in this current environment?

Elias: Let me talk from the European side. It is striking that I think it was back in 2016, the European administration set up a reshoring monitor and attract around 700 reshoring projects, meaning intentions to reshore. They closed the project down in early 2019. And there’s some interesting information in there because it shows projects that reshored and did well. And there are striking examples of projects that reshored or shored closer to market and failed. And actually, Europe and the U.S. have one in common. It was when Adidas set up its Speed factories. Recall, in the old days, Adidas was manufacturing its sports shoes and gear in China, and it moved into Vietnam, as China became too expensive. And then to stay ahead of the game, Adidas said, “We’re going to make fully automated factories. We’re going to place them near market. One was in the U.S., the other was in Germany, and will allow people to actually assemble or design their sneaker off the internet and get it delivered within a couple of days, as opposed to getting a standard off the shelf thing that took six weeks to tr