Barcelona, April 9, 2025.- According to MHD Supply Chain News magazine, joint report from the World Economic Forum (WEF) and Kearney, Beyond Cost: Country Readiness for the Future of Manufacturing and Supply Chains, examines how global manufacturers are adapting their strategies in response to geopolitical shifts, trade disruptions, and technology advancements.
The report underscores a paradigm shift in supply chain decision-making: companies are no longer prioritising cost alone, but instead balancing cost, performance, resilience, and sustainability when selecting manufacturing and sourcing locations
Shifting supply chain strategies
The regionalisation trend is gaining momentum, with more than 90 per cent of global manufacturers prioritising regional supply networks to build resilience and ensure continuity in the face of disruptions.
A survey of 300 global operations executives, conducted as part of the report, found that nearly two-thirds of manufacturers are implementing a “power-of-two” geographical sourcing strategy. This means securing supply from at least two distinct regions to mitigate risks related to trade conflicts, regulatory shifts, and climate-related disruptions.
The report categorises countries into four key archetypes, based on manufacturing’s contribution to GDP and GDP per capita:
- Adapters – low manufacturing contribution to GDP and below-average GDP per capita (e.g., Brazil, India).
- Convergers – low manufacturing contribution but above-average GDP per capita (e.g., Denmark, US).
- Connectors – high manufacturing contribution but below-average GDP per capita (e.g., Mexico, Vietnam).
- Scalers – high manufacturing contribution and above-average GDP per capita (e.g., Ireland, Singapore).
The FDI Confidence Index within the report highlights that Connectors like Vietnam and Mexico are seeing rising foreign direct investment (FDI), while Adapters (such as Brazil and India) have experienced declining attractiveness for inward investment.
Seven key readiness factors
The report identifies seven critical factors that determine a country’s readiness for supply chain investment:
- Infrastructure: Transport networks, digital connectivity, and logistics capabilities.
- Resources and energy: Stable supply chains for raw materials, access to renewable and traditional energy sources.
- Technology: R&D ecosystem, IP protection, and adoption of advanced manufacturing technologies.
- Labour and skills: Availability of STEM-skilled workers, workforce costs, and training programs.
- Fiscal and regulatory environment: Business-friendly tax policies, investment incentives, and ease of doing business.
- Geopolitical landscape: Trade policies, FDI attractiveness, and political stability.
- Environmental, Social & Governance (ESG) – Sustainability standards, net-zero commitments, and corporate social responsibility initiatives.
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