Forming an Independent View on Automation as the Enabler of Reshoring

Pranav formed this view on his own time, not as part of an assigned mandate. The starting point was a pattern he kept noticing in transaction and comps work: industrial companies getting premium multiples in recent deals weren't just the ones with reshoring exposure. They were specifically the ones with recent heavy CapEx in automation and robotics.

That pattern showed up enough times that it stopped feeling like a coincidence. He started cross-referencing it against earnings call transcripts for companies talking about reshoring. The ones that sounded credible versus the ones that sounded like investor relations messaging usually came down to whether they could point to a specific automation investment backing the claim, not just an intention.

The underlying logic he kept coming back to was straightforward. Reshoring without solving the labor cost gap doesn't hold up on its own. Labor in nearshore locations is still more expensive than where production is moving from. What makes reshoring viable at scale is automation closing that gap. A factory with heavy robotics doesn't care as much where it's located because labor costs stop being the deciding factor.

His thesis: the market is still valuing reshoring and automation as two separate stories, when automation is actually the enabler that makes reshoring structurally sound rather than sentiment-driven. What would prove him wrong is reshoring announcements scaling up without a corresponding jump in automation CapEx at the same companies.