Roughly 98% of American manufacturing firms have fewer than 500 employees.
According to the National Association of Manufacturers, the United States had 239,265 manufacturing firms in 2022, and all but 4,177 had fewer than 500 employees. Nearly three-quarters had fewer than 20 employees, and 93.1% had fewer than 100.
That fact tells us something important about what American manufacturing actually looks like. The industrial base is not made up primarily of the giant plants and household names that dominate headlines and policy discussions. It is made up of hundreds of thousands of smaller operations: machine shops, plastics companies, fabricators, specialty chemical producers, rubber manufacturers, electronics companies, wood-product manufacturers, coatings businesses, and thousands of other firms spread across communities throughout the country.
Many of those companies are highly specialized. Many have been operating for decades. Many possess equipment, workforce capability, engineering knowledge, certifications, and production experience that extend well beyond the products they are currently selling.
At the same time, a much smaller group of very large companies represents an enormous share of purchasing power and operates some of the most sophisticated procurement and supply-chain organizations in the world. Those companies know their existing suppliers, their Tier 1 networks, the major players in their industries, and the businesses already operating inside established procurement systems.
In a practical sense, the 2% know the 2%.
The much larger opportunity is figuring out how the 2% can see and access the 98%.
That is not a criticism of large buyers or global supply chains. It is simply a reflection of scale. No procurement organization, no matter how sophisticated, can reasonably know every capable American manufacturer. A large company may know the overseas supplier currently producing a component, but have no reason to know that a 60-person manufacturer in West Virginia, Kentucky, Indiana, Arkansas, or Georgia has the machinery, process knowledge, materials expertise, certifications, and available capacity to compete for some portion of that business.
The manufacturer faces the same problem in reverse. A small or mid-sized company may know its own capabilities very well, but have little visibility into which American companies are purchasing similar products from overseas, how those products are classified, who controls the buying decision, what specifications matter, or what would be required to get into the procurement process.
That is where the supplier discovery problem begins.
The problem is visibility, not capability
The United States has a deep and diverse manufacturing base, but much of that capacity is fragmented across smaller companies that are difficult for large buyers to identify at scale.
The U.S. Census Bureau’s 2022 Economic Census counted 286,626 manufacturing establishments across the country. That is a massive industrial landscape, and much of the useful information about what those companies can actually make is not captured cleanly in any single place.
A manufacturer’s website may show the products it sells today, but that does not necessarily tell a buyer what the company is capable of making tomorrow. A product catalog may show finished goods but say very little about the underlying machinery, processes, tolerances, materials, certifications, tooling, engineering support, or unused capacity behind those products.
That distinction matters because manufacturing capability is usually broader than product history.
A machine shop that currently serves one industry may be capable of serving another. A plastics company producing one family of components may be able to make a related product with little or no additional capital. A fabricator may have the equipment and workforce to produce something it has never marketed simply because no one has ever brought it the opportunity.
The productive capacity is there. The challenge is making it visible.
This is not an argument against imports
Any serious discussion about import substitution has to begin with the reality that companies import for rational business reasons. Cost matters. Quality matters. Capacity matters. Technology matters. Reliability matters. Lead time matters. Existing supplier relationships matter. Risk matters.
The objective is not to pretend those considerations do not exist or to argue that every product should be made domestically.
The more useful question is much narrower:
When an American company is already purchasing a product from overseas, is there a domestic manufacturer capable of competing for that business?
That manufacturer should not be guaranteed the contract. It should not win because of geography alone. It should still have to compete on the terms that matter to the buyer, including cost, quality, capacity, timing, certification, reliability, and risk.
But there is an important difference between losing a competitive sourcing decision and never being discovered in the first place.
That difference is where import substitution becomes practical.
The demand that already exists: the 2% already know how to buy.
America spends a great deal of time trying to create new economic opportunity. States recruit companies, economic-development organizations build industrial parks, universities create workforce programs, communities offer incentives, and companies invest in new technologies and facilities.
All of that matters.
But there is another source of economic opportunity sitting in front of us every day: the products American companies are already buying from overseas.
The demand already exists. The buyer already exists. The transaction is already occurring. The question is whether some portion of that demand could be competitively served by productive capacity that already exists in the United States.
That is the core idea behind import substitution and a central part of the work of the National Reshoring Center: helping states and communities understand where existing import demand may overlap with domestic manufacturing capability, and then organizing the right partnerships around those opportunities.
It is also the problem Reshore Technologies is being built to help solve.
The opportunity is to connect import data, buyer demand, product classifications, manufacturing capabilities, tariff exposure, supplier information, and geography in a way that allows both sides of the market to see one another more clearly.
That changes the nature of supplier discovery.
Instead of asking a small manufacturer to search blindly for new customers, we can begin with actual products being purchased from overseas.
- Who is buying them?
- What exactly are they buying?
- What processes are required to manufacture those products?
- Which domestic manufacturers appear to have relevant capability?
- What is missing between capability and commercial readiness?
- What would have to be true for the buyer to consider a domestic alternative?
Those are much more actionable questions.
Large companies do not need to be taught procurement.
They already know how to manage sophisticated supply chains, qualify suppliers, control quality, negotiate price, manage risk, and operate at scale.
The issue is whether their sourcing teams have visibility into the full breadth of American manufacturing capability.
A major buyer may know the established global supplier for a component, but not the 50-person company in Appalachia that could make it. It may know the dominant supplier in a category, but not the small manufacturer with adjacent capability sitting two states away. It may be importing a product because the current supplier has been in the network for twenty years, while a domestic company capable of competing never appears on the radar.
That is why the 2% and the 98% framing matters.
The 2% have purchasing power, procurement sophistication, and established global networks.
The 98% represent an enormous amount of distributed productive capacity.
The opportunity is to connect the two.
When supplier discovery becomes economic development.
This is where the conversation moves beyond procurement.
According to the National Association of Manufacturers, every $1 spent in manufacturing generates $2.69 in total economic impact across the U.S. economy once indirect and induced effects are included.
That means the value of a manufacturing contract does not stop with the company that wins it.
A new order can lead to equipment purchases, additional raw-material demand, more freight activity, another shift, new hires, apprenticeships, engineering work, facility expansion, and additional spending throughout the local economy.
For a very large company, a $5 million sourcing decision may represent only a small fraction of its total procurement activity. For a 75-person American manufacturer, that same $5 million contract can meaningfully change the trajectory of the business.
It can mean new equipment, more employees, higher utilization, and a stronger position to compete for the next piece of business.
Multiply that across thousands of potential sourcing decisions and the impact becomes much larger.
This is why supplier discovery should not be viewed only as a purchasing function. It can also become an economic-development strategy.
The goal is better market intelligence.
America will continue to import. It should.
Global trade will remain part of how companies source materials, technology, components, equipment, and finished products.
The opportunity is not to replace global trade. The opportunity is to understand it better.
We should know what American companies are purchasing from overseas. We should understand where dependencies exist. We should know what our domestic manufacturing base can already produce, where capability is close, and where targeted investment could make a domestic supplier competitive.
Most importantly, when a capable American manufacturer exists, there should be a practical way for that manufacturer to become visible to the buyer.
That is not protectionism.
It is better market intelligence.
The 2% already know the 2%.
The real opportunity is helping them discover the 98%.
That is where supplier discovery becomes import substitution, import substitution becomes new business, and new business becomes manufacturing growth in communities across America.
Bring Manufacturing Home.