The author of “Megatrends,” the famous book that told of the future and stayed on the New York Times bestseller list for two years in the 1980s, once called manufacturing “a declining sport.” But at the moment, the technology industry in the United States may be rewriting the future. 

Between 2010 and 2017, approximately 576,000 manufacturing jobs came to the U.S. as a result of reshoring or foreign direct investment, according to the latest data from the Reshoring Initiative, a nonprofit group that promotes bringing offshored manufacturing jobs back stateside.

One of the key forces in the growth of reshoring has been technology equipment manufacturing, including hardware and components. Apple, for example, announced in 2018 that it intends to create more than 20,000 new jobs in the U.S. by 2023 to go along with roughly $30 billion in capital expenditures.

Any number of factors are driving jobs back to the United States, such as rising wages abroad and a desire for proximity to companies’ customers. A unique set of concerns exist when it comes to tech manufacturing, though. Namely, U.S. authorities and tech hardware manufacturers have grown wary of security risks posed by a reliance on components produced in foreign countries. Those security risks take several forms. As pointed out by national security expert Brig. Gen. John Adams (U.S. Army, Ret.), they include the threat that our R&D expertise could follow manufacturing out of the country, diminishing the U.S.’s ability to design innovative technology. The loss of tech manufacturing also jeopardizes the knowledge base needed to produce military-grade semiconductors. (Arguably, that led to concerns in 2016 when IBM, which created chips for the Department of Defense and the NSA from secure fabrication plants, sold its semiconductor business to an Abu Dhabi-owned company.) Security concerns are not limited to the efforts of the Department of Defense. With increasing adoption of smartphone and digital technology by consumers, personal technology device security is increasingly relevant. 

The current flap over China’s Huawei Technologies Co. Ltd. offers a prime example of how such concerns are impacting the tech market. Headquartered in Shenzen, China, Huawei manufactures more telecommunications equipment than any other company on the planet. Unfortunately for U.S.-based companies that rely on components from the consumer electronics manufacturer, Huawei has come under intense scrutiny from the U.S. government over charges of stealing trade secrets and violating sanctions against Iran. Lawmakers and regulators also fear that the Chinese government could use Huawei equipment as a Trojan horse to monitor and eavesdrop on U.S. citizens. The defense funding bill signed into law in August 2018 includes a measure prohibiting U.S. government agencies from using technology provided by Huawei and ZTE, another large Chinese telecom firm that has raised the suspicions of the U.S. intelligence community.

Given growing worries in the U.S. over cyberthreats from foreign actors, it seems likely that pressure to use domestically manufactured components will only intensify going forward. In an ideal world, that pressure would translate into more jobs for U.S. workers, as well as growing demand for the equipment necessary to produce homegrown high-tech products. (Financing that equipment, of course, is where Atalaya Leasing comes into the picture.)

This is not a pie-in-the-sky vision. For one thing, we’ve been through a version of it before. In the 1980s, the U.S. semiconductor industry was dying fast. But then a number of forces combined to revive it — including, crucially, a government-supported consortium of chip makers dedicated to revitalizing the industry. Known as Sematech, it was critical in re-establishing the U.S. lead in semiconductor manufacturing by the early 1990s.

Similar efforts, including public-private partnerships, are showing great promise to lead the continued comeback of tech manufacturing in the U.S. In January, Atalaya Leasing worked on a transaction to provide equipment lease financing to a public-private partnership that operates a domestic semiconductor manufacturing and research facility that is also intended to support microelectronics cybersecurity center. We see this as a continuing trend. 

Firms with both the capital flexibility and expertise to finance such forward looking investments could have some busy years ahead.