Process reshoring, local capabilities and sustainable competitiveness in clustered SMEs

Purpose The purpose of this paper is to examine how cluster-specific collective assets enable clustered small and medium-sized enterprises (SMEs) to recover selected activities and how this process relates to competitiveness and environmental sustainability. More specifically, this paper seeks to explain when and how process reshoring becomes feasible in clustered SMEs. Design/methodology/approach This paper uses a qualitative multiple-case study based on semistructured interviews with senior managers from six SMEs located in the Valencian textile cluster. The analysis combines within-case and cross-case comparison and is supported by secondary sources, including company websites, press coverage, ORBIS data and prior research on the cluster. This design enables the capture of selective, process-specific forms of reshoring in clustered SMEs. Findings The findings show that reshoring in clustered SMEs is better understood as process reshoring rather than full production return. Firms selectively recover strategically relevant and locally feasible activities while maintaining offshore sourcing for other inputs or stages, resulting in hybrid configurations. This study also shows that technical knowledge, complementary capabilities and institutional intermediation within the cluster enable this selective recovery. Finally, process reshoring can strengthen competitiveness and, under specific conditions, also support environmental sustainability through better traceability, reduced transport intensity and cleaner production processes. Research limitations/implications This study is based on a limited number of qualitative cases within a single cluster, which constrains the transferability of the findings. In addition, the role of collective assets may differ in weaker or less organized local production systems. Future research could compare different clusters and industries and assess the longer-term effects of process reshoring using mixed methods or quantitative designs. Practical implications For managers, the key issue is not whether to reshore production in general, but which specific processes are worth recovering to improve control over quality, responsiveness, customization and service. The findings also suggest that firms should evaluate not only their internal capabilities but also the availability of local support structures, technical institutes, business associations and complementary firms that can enable selective recovery. Social implications The paper suggests that selective local recovery may contribute to more resilient and potentially more sustainable regional production systems. Where process reshoring improves traceability, reduces transport and supports cleaner or more circular production, it may help align industrial renewal with environmental goals. The findings also point to the broader value of maintaining local industrial capabilities and support infrastructures. Originality/value This paper refines the concept of reshoring for clustered SMEs by introducing process reshoring as a more appropriate unit of analysis than full production relocation. It also contributes to cluster research by showing that collective assets operate as enabling conditions for selective productive reconfiguration. Finally, it adds to the sustainability debate by explaining when competitiveness and environmental sustainability can become aligned in clustered SMEs.