2.6 Geopolitical landscape Geopolitical landscape FIGURE 10 Navigating the current geopolitical environment requires a strategic approach to international relations that balances national interests with global collaboration. Countries looking to strengthen their industrial ecosystems should build resilient diplomatic relations and alliances that can adapt and respond to the shifting tides of global politics. The ability to engage with diverse markets, mitigate geopolitical risks, protect staff in geographically risky environments and preserve economic collaboration will be key differentiators in attracting investment in the coming years. Using the indices described in the production readiness model (see Appendix 1), the top three strongest-performing markets for trade policies, international relations, political stability and other factors were Ireland (scaler), Finland (converger) and Denmark (converger). Geopolitics will increasingly shape global value chains, with countries falling into three broad categories: those closely aligned with the US, those closely aligned with China, and those maintaining an agnostic or equidistant stance, like Mexico and Vietnam. The latter group may hold significant advantages in supply chain dynamics, leveraging their neutrality and scale to build and serve diverse markets effectively. Rajesh Achanta, Former Vice-President, Supply Chain, Consumer Packaged Goods, Asia (2020-2023)Sub-factors Trade policies Trade agreements, tariffs and regulations affecting cross- border trade and investment International relations Diplomatic relations and alliances that impact economic collaboration and security Political developments Geopolitical stability and personnel safety within the country’s operating environment Indices Perception of safety Trade agreements Tariffs affecting cross-border trade and investment Diplomatic relations and alliances Rule of law Environmental, social Geopolitical regulatory and skillsResourcesInfrastructure Technologyand governance landscape Fiscal and Labourand energy Source: World Economic Forum in collaboration with Kearney. Beyond Cost: Country Readiness for the Future of Manufacturing and Supply Chains 20

Beyond Cost 2024