> Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so.

Sure, this works when you know exactly what you want. If you're prototyping or looking for a replacement component, those who can walk/drive to visit 10 potential suppliers' factories in a day have a competitive advantage versus waiting 10 business days for the samples to arrive.

Having a concentration of jobs in one place also results in having a concentration of domain experts in that place; forming a self-sustaining ecosystem. A lot of local governments the world over have tried and failed to replicate Silicon Valley, but without the critical mass of academia, technologists and VCs. Trying to replicate Shenzen without the machinists and injection mold greybeards is equally fruitless.