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13 February 2013

An abattoir in Bucharest and a battery manufacturer in Kyoto. One was the source of horsemeat which appears to have turned up in pretty much every cheap beef dish in Britain. The other was the company responsible for the failing batteries in Boeing’s new 787 Dreamliner.

The brouhaha over burgers and Boeing may appear to be entirely unconnected, but they have one important factor in common: both of these problems have been created by outsourcing.

From call centres in India to textile factories in China, outsourcing was once capitalism’s big idea. Its proponents argued products should be made as cheaply as possible – where they were made was irrelevant. Throughout the 1990s and long into this century, outsourcing was king. Millions of jobs in the US, Britain and throughout western Europe moved east.

Slowly though, the tide turned. Consumers wanted to know where the products they were buying actually came from. Smart companies realised there was money to be made by keeping quality standards high. Understanding and controlling every part of the supply chain has become vital, once again.

Reshoring is an ugly word but it’s one filled with hope. Companies that outsourced are now bringing jobs home again. With big-name US white goods manufacturers and small trench coat designers in northern England doing alike, there is an understanding that manufacturing needs to take place as close to home as possible. We talk about the “Made in” label a lot here at Monocle and here’s where we return to burgers and Boeing. The British supermarkets filling their freezers with cheap beef products had no idea what was in their burgers and lasagnes because they weren’t made in Britain. Boeing didn’t immediately know how to fix the problem with their batteries because they weren’t made in Everett.

They are not merely outsourcing labour, they are outsourcing responsibility. And there is another enemy of modern day capitalism that will help solve this problem: regulation. The Food Standards Agency, once eagerly lined up for the chop by David Cameron as an example of the overbearing “nanny state”, is now likely to find its role expanded. While in the US, the Federal Aviation Administration has ensured that the Dreamliner’s slow return to the air will be safe. Its very presence gives passengers and airlines the confidence that the problems will be solved before anyone gets on a 787 again.

Whether it’s aviation or agriculture, there is nothing wrong with making your products with pride while an independent body ensures that nobody gets hurt.

Steve Bloomfield is foreign editor for Monocle.


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