Powering up industrial manufacturing

Reindustrialization is transforming industrial manufacturing. Driven by the need for resilient supply chains, a focus on sustainability, and the promise of technological innovation, companies are investing heavily in domestic production and advanced capabilities.

Investment in this sector is set to soar in the coming years. According to our Capgemini Research Institute report The resurgence of manufacturing: Reindustrialization strategies in Europe and the US, 72 percent of organizations are already developing or implementing comprehensive reindustrialization strategies.

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.

Resilience and competitiveness fuel reindustrialization

Supply chain resilience is the top priority for industrial manufacturers, with 73 percent citing it as a primary driver. Additionally, a desire to recapture economic value and increase competitiveness is a significant motivator, shared by 58 percent of organizations. This dual focus on stability and growth is propelling the reindustrialization movement.

Strategic focus on domestic manufacturing and supply chains

The majority of industrial manufacturing organizations believe the drive for sovereign manufacturing capabilities will persist.

Climate ambitions and the sustainability imperative

Reindustrialization is seen as a key enabler for achieving climate goals. Our research revealed a two-way relationship between reindustrialization and sustainability.

“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 as a driver of innovation and sustainability

The industrial manufacturing industry is highly optimistic about technology’s transformative potential. Seventy-six percent believe reindustrialization will drive innovation and advancement, and 63 percent are increasing investments in digital technologies like AI, cloud, and data analytics to boost productivity. Notably, 58 percent of organizations are also using these technologies to combat climate change, illustrating the symbiotic relationship between digitalization and sustainability.

A highly skilled workforce for a new industrial era

Reindustrialization requires a new kind of workforce – one that is highly skilled in both traditional manufacturing and advanced digital technologies. Most organizations acknowledge this need, and 50 percent are actively upskilling their employees. A significant shift is projected, with the share of the workforce possessing advanced digital skills expected to jump from 31 to 53 percent within three years.

“To bridge the skills gap within the organization, we are enhancing the capabilities of existing employees, fostering education in EV manufacturing, collaborating with universities, and advocating for science, technology, engineering, and mathematics (STEM) education.”

– A supply chain executive from a US-based automotive organization

Action steps for acceleration

The industrial manufacturing industry is undergoing a profound transformation through reindustrialization. By prioritizing resilience, sustainability, and technology, the sector is positioning itself for renewed growth, competitiveness, and a more sustainable future.