Large organisations across Europe and the US are intensifying their focus on reindustrialisation to mitigate concerns over supply chain pressures, rising tariffs and trade disputes, according to research. 

A report by the Capgemini Research Institute found that two-thirds of the 1,400 senior executives it surveyed from organisations with revenues over $1bn have an active reindustrialisation strategy – up from 59% in 2024.

Reindustrialisation includes onshoring or “reshoring” production back to the domestic market; “nearshoring” to a neighbouring country; or “friendshoring” – locating manufacturing in countries that are “geopolitical and mercantile allies”.

Most (86%) organisations, however, believe that reindustrialisation will require a more highly skilled industrial workforce, up from 72% in 2024. Additionally, two-thirds (65%) still view domestic skills gaps as a major challenge, showing no improvement from 64% in 2024.

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One senior supply chain executive at an aerospace company highlighted the need for digital expertise to manage smart and tech-enabled manufacturing facilities: “Without skilled people to run and optimise these systems, the investment stalls. Therefore, training and upskilling must go hand in hand with digital transformation.”

The report found that, with workforces ageing, 87% of organisations anticipated significant labour shortages, with 74% also citing restrictive immigration policies.

Aiman Ezzat, chief executive of Capgemini. “After decades of globalisation, the imperative to reindustrialise is clear. Organisations are intensifying their efforts to de-risk and diversify their manufacturing and supply chains through friendshoring to reinforce proximity to markets.

“Complexities and costs involved in re-orchestrating supply chains are not being underestimated. Business leaders are investing to navigate the unpredictable macro-environment and drive long-term competitiveness, taking advantage of advanced technologies. In an evolving global landscape, regional collaboration with suppliers, technology providers and policymakers will be key to build a resilient and adaptable manufacturing ecosystem.”

Supply chain resilience, geopolitical concerns, and a desire to be closer to customers emerge as the top drivers of reindustrialisation. Supply chain pressure was cited by 95% of executives, a significant increase from 69% in 2024. A desire to be closer to customers was cited for the first time, and was the second most important driver for survey participants (92%).

Over the past year, business leaders across sectors said they have intensified their strategy to relocate their production and supply chain with 56% having invested in either “reshoring or nearshoring” of their manufacturing, up from 42% in 2024.

This trend is predicted to continue. In the next three years, onshore and nearshore operations are expected to account for 48% (up 7 percentage points) and 24% (up 2pp) respectively of total manufacturing capacity.

The survey found that large UK businesses have spent around $440 billion reshoring and nearshoring their operations since 2022. Nearly two-thirds (59%) planned to upgrade or expand their manufacturing capabilities in the UK and nearby countries by 2028.

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