Navajo Nation: the New Reshoring Destination

It’s rare that a group in Silicon Valley becomes speechless. When a colleague kept us spellbound during a staff meeting regaling his tales of filming a video blurb in Navajo Nation a few weeks ago, I knew this was a story for the masses. Navajo Nation, the largest area belonging to Native Americans, comprising three states and a landmass larger than the state of Connecticut, plays host to many high tech industries. This was news for me.

I decided to sit down with my colleague, Chris Damm (an International Trade Specialist with the San Jose Export Assistance Center), to find out more about why Navajo Nation should be considered the prime “reshoring” destination for U.S. companies currently considering manufacturing opportunities in China, Mexico or elsewhere.

Me: What impressed you most about your trip to Navajo Nation?

Chris Damm (CD): I was immediately struck with the willingness of the Office of Economic Development to work with companies to set up facilities there. Fairchild Semiconductor set up a manufacturing unit as far back as 1969 and other companies have followed suit, including Apple, Cloud Microphones, Motorola, Hewlett Packard, General Motors and Saturn.

Me: Interesting – I never knew this! What advantages does Navajo Nation have over countries that have specialized in low-cost offshoring?

CD: The prime advantage is that U.S. companies get the “Made in USA” cache in a low cost environment. Navajo Nation sets up its own tax structure, so companies could negotiate opportunities with them. This area is large, but has good transportation infrastructure. Additionally, language is not a factor and companies would not have to worry about customs or transfer pricing. Given its location in the United States, quality control would be easier and safeguarding intellectual property is straightforward. Plus, companies would have much closer access to its labor force. This area has had a solid history of manufacturing with a strong track record. Additionally, it would help out an area with a high employment rate.

Me: Sounds like the best kept secret! What steps is Navajo Nation taking to bring more high tech companies to their territory?

CD: Navajo Nation conducted a trade mission recently to Israel to encourage more Israeli investment in the area. They received a multi-million dollar grant from the U.S. Department of Commerce to install broadband to enhance its IT infrastructure. They also established Special Economic Zones to provide a more business-friendly environment to build manufacturing facilities and expand existing facilities and plants.

Me: What a win-win!

CD: Yes. Navajo Nation suffers from a “brain drain” and wants to provide its tech-savvy workers with opportunities closer to home. They describe themselves as “people who are good with (their) hands” and see themselves as artists. So developing a strong manufacturing base is a natural transition. Plus, by setting up manufacturing units in Navajo Nation, we can bring down our trade deficit while also helping one of the poorest parts of the country. There are also lots of trickle-down effects for ancillary industries and businesses as well.

Me: This is a great story and I hope to hear of more manufacturing successes in Navajo Nation.

CD: Thanks, me too. It’s a tremendous opportunity for U.S. companies to work with such talented people in the United States in an economically depressed zone with such strong advantages.

Me: Thanks again, Chris. I can’t wait to see your video when it’s done!

CD: Thank you. This is a great story that I’m happy to share.

Note: Photos courtesy of Chris Damm. All rights secured.

Aileen Nandi is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.