I completely agree with this. Nothing is more helpful for a small company than being able to easily go to in-house or local factories to discuss production techniques with the people who live and breathe it day in and out. You’re in a tough spot if you get all the way to the finalisation stage of your amazing new product if it isn’t able to be produced, to budget, with its design intent intact. As you’ve pointed out, it can be very expensive up-front for a small business to manage the logistics of manufacturing offshore.
Product designers will have to be flexible.
For example, a local electronics factory that employed 15 or so designers in 1995 now only employs 3, because they now offshore most of their manufacturing and with it went a a huge amount of the production level detail design workload and knowledge. Now theres a high supply and a low demand for designers, meaning that they have to be flexible with location and job choice so they can find an opportunity to use their skills.