**London**: A Capgemini survey shows large firms in the US and Europe prioritising reindustrialisation with a projected $4.7 trillion investment over three years, driven by supply chain vulnerabilities and geopolitical concerns, as UK companies lead the trend with significant financial commitments and initiatives like friendshoring.
A recent survey conducted by Capgemini has revealed a shift in focus among large organisations in the US and Europe towards reindustrialisation, overriding short-term profitability considerations. This strategic pivot is largely driven by a desire to alleviate supply chain vulnerabilities and mitigate geopolitical risks.
The survey, which collated responses from 1,400 senior executives, indicates that businesses intend to spend approximately $4.7 trillion on reindustrialisation initiatives over the next three years, a notable increase from the $3.4 trillion projected in 2024. Factors such as rising tariffs and escalating trade tensions are significantly influencing this trend. In the UK, 97% of executives have identified supply chain resilience as a priority, marking a substantial rise from 68% recorded the previous year.
British organisations appear to be at the forefront of this movement, with projections indicating an investment of $650 billion in reindustrialisation by 2028, up from the $430 billion estimated in 2024. There has been a marked increase in the practice of nearshoring, with 28% of UK companies reportedly investing in relocating production closer to domestic markets, compared to only 13% the previous year.
The concept of ‘friendshoring’—the relocation of supply chains to allied nations—is also gaining traction. A pertinent example of this is the G7 agreement between the UK and Japan, aimed at fostering research and development collaboration and skills exchange in the semiconductor sector. Almost three-quarters (74%) of UK executives believe friendshoring will play a vital role in the coming years, predicting it will account for 38% of total manufacturing capacity within the next three years.
Mike Dwyer, head of intelligent industry at Capgemini UK, explained, “Organisations are adapting to the evolving geopolitical landscape by reshoring and nearshoring their operations. This is not just about mitigating risk but also about improving operational resilience and fostering closer relationships with key markets.”
In addition, a substantial investment of £250 million has been confirmed for the semiconductor industry in Wales. Announced during the UK Chancellor’s Spring Statement, Vishay Intertechnology, a semiconductor manufacturer, is set to expand its operations in Newport, creating hundreds of highly skilled jobs. This investment is particularly significant as it aims to enhance the production of advanced Silicon Carbide semiconductors, essential for the electric vehicle manufacturing sector. Chancellor Rachel Reeves referred to this development as “a major win for the UK’s advanced manufacturing ambitions.”
The US is also experiencing a parallel trend, with significant investments in domestic manufacturing. Schneider Electric, an energy management company, has disclosed plans for a $700 million expansion of its US operations, which is expected to generate over 1,000 new jobs and support growth in artificial intelligence-related sectors.
The survey indicates that more than half of US organisations have already committed to nearshoring or reshoring initiatives in the past year, with 35% planning further investments in 2025. Nearly 60% of executives involved in the survey affirmed their intention to continue prioritising reindustrialisation efforts, despite the possibility of increased costs, as they aim to reduce dependence on Chinese supply chains and enhance long-term competitiveness.
Source: Noah Wire Services
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