Revitalizing aerospace and defense

Global disruptions have ignited a reindustrialization surge within the aerospace and defense industry. Organizations are prioritizing resilient supply chains, domestic manufacturing, and technological advancements. This shift promises to boost competitiveness, accelerate innovation, and enhance sustainability but, while many businesses are building their strategies, only 22 percent have a comprehensive reindustrialization strategy in place.

A new report by the Capgemini Research Institute, The resurgence of manufacturing: Reindustrialization strategies in Europe and the US, reveals key findings that will shape the future of the aerospace and defense sector.

What is reindustrialization?

Reindustrialization is the re-establishment of global supply chains and manufacturing operations, often with the aim of bringing them closer to – or even within – domestic markets.

What are the top factors driving reindustrialization?

Supply chains have proven vulnerable, and more than 60 percent of aerospace and defense organizations we surveyed say supply chain pressure, reliability, and sustainability concerns are the top drivers for their reindustrialization. Geopolitical tensions and the desire to reduce labor costs are also key factors.

In our manufacturing process, there are assembly factories where key components are still imported from Asian countries, and then the final assembly takes place in newer facilities in Mexico via nearshoring. This approach allows for efficient production and distribution of goods.”

– A chief executive from a prominent US technology company

A push for domestic manufacturing

The aerospace and defense industry is making a decisive shift. Nearly four in 10 organizations have invested in reshoring initiatives. Projections indicate that within three years, onshore manufacturing will comprise 44 percent of total production capacity. What is fueling this trend? Reshoring investments, already made by 57 percent of organizations.

Achieving sustainability goals

Reindustrialization can help businesses make significant environmental strides. Aerospace and defense companies see a bright future, anticipating a reduction in carbon emissions. Optimism is strong that reindustrialization will help organizations achieve climate ambitions across industries.

Our commitment to reindustrialization extends beyond economic growth. It encompasses job security for future employees, the nurturing of local talent, imparting social education, championing environmental benefits, and diligently mitigating all risks – whether they stem from supply chain vulnerabilities, natural disasters, or ecological impact. Reindustrialization is not just about profits; it’s about shaping a sustainable and resilient future for all.”

– Supply chain executive from a US-based global automotive organization

Technology is the backbone of change

Modernization is at the forefront of the industry’s transformation. Many aerospace and defense organizations prefer a “brownfield approach” that involves upgrading existing facilities with advanced technologies. The pace is notable: 25 percent have completed upgrades within the past year, and 54 percent will do so within the next one to two years.

Meeting the demand for a skilled workforce

Reindustrialization requires a new breed of worker. A majority of organizations understand that this shift demands a workforce with advanced skills. The focus on digital proficiency is particularly striking, with the need projected to increase from 34 to 53 percent of the workforce within three years.

Six steps for acceleration

Through our research, industry expertise, and deep experience driving intelligent industry transformations at global organizations, we believe reindustrialization will reshape the sector, strengthening its global competitiveness for decades to come.