Nearshoring is the New “Next Silicon Valley” — And That’s a Problem
Nearshoring is like all these "the-silicon-valley-of" projects all around the world - looks great on paper, everyone outside the ecosystem wants it to happen, but nobody has actually pulled it off.
There’s a predictable formula here:
A few headlines about tariffs or geopolitical instability
A surge of enthusiasm from policymakers and consultants
A wave of investment chasing proximity over price
…and then the realization that you can’t fast-track decades of infrastructure, talent, and cultural maturity
Sound familiar?
Why Nearshoring ≠ Manufacturing Magic
1. Talent Density Isn’t Optional
Every successful ecosystem — whether it’s tech or manufacturing — is built on a deep, diverse, and highly skilled talent pool. Silicon Valley didn’t emerge because of a government task force or some cool tax incentives. It happened because thousands of engineers, entrepreneurs, and operators showed up and stayed for decades.
Nearshoring efforts often overlook this. You can move a factory, but you can’t instantly clone the experience, systems thinking, or operational excellence embedded in places like Shenzhen. Proximity ≠ capability.
2. Culture Can’t Be Copy-Pasted
Silicon Valley’s “innovation culture” wasn’t designed — it evolved. The same goes for China’s manufacturing dominance. It wasn’t built on slogans; it was built on grit, scale, and relentless operational efficiency.
You can’t nearshore a supply chain and assume the operating culture will just snap into place. It won’t — and companies that ignore this are in for a rude awakening.
3. Supply Chains Require Physical Infrastructure
Moving goods at scale physically is not easy without supporting infrastructure. Without large ocean vessels, waterways, ports, and skilled labor to operate that, even if you can manufacture the product, you may have too many bottlenecks getting raw materials in, and the finished goods out.
Now double that for airfreight. You have airplanes, airports, aircargo equipment, maintenance crews, the high skilled labor like pilots, and you cannot just pick a random city and double the air capacity overnight.
And then, triple that for ground transport that shuttles cargo from the manufactures to the oceanports and the airports. Those who don’t understand this will fail at trying to build a manufacturing ecosystem.
4. Machines that make Machines
Where will all the heavy machinery and equipment needed to make physical products come from? In China, most of this comes from China. Of course there are highly specialized machinery and equipment from all around the world. Japan and Germany are famous for their manufacturing prowess, and the US have mastered significant numbers of complex manufacturing processes, but the majority of production is done from machinery that’s itself manufactured locally in China.
Mexico: The Case Study That Says It All
Mexico was hyped as the ideal nearshoring solution for North America: close, cheap(er), integrated, and big.
But then came tariffs. Again.
Now the same companies that shifted operations to Mexico to escape China-based risks are finding themselves right back in a new kind of geopolitical crossfire. The result? Higher costs, more uncertainty, and a strategic plan that looks shakier by the day.
There is nonetheless strong arguments for the value and advantage that a strong manufacturing base in Mexico would bring to the US and both the North and South American economies. The ROI will just not be quick or obvious without large benefactors or investors providing the capital for these projects. Apple?
So What’s the Playbook?
Let’s be clear: nearshoring isn’t a bad idea. But it’s not a silver bullet either.
If you treat nearshoring like a branding exercise — "The Shenzhen of the West!" — it’ll fail.
If you treat it like a 30-year commitment to infrastructure, education, incentives, and culture building, it might work.
But that’s not the VC model. That’s not the quarterly-results model. That’s the nation-building model. There’s a reason Shenzhen wasn’t built overnight. If we want nearshoring to succeed long-term, we need to stop treating it like a press release and start treating it like policy.
With the latest round of global tariffs, I think that Trump’s administration is dead serious about bringing manufacturing back to the US, and that’s the kind of extreme action that just might get some change.
Want to talk about how your business is navigating nearshoring right now? Drop a comment or shoot me a message — I’d love to hear how you’re seeing it play out on the ground.