Conclusion The continued pressure exerted by global megatrends will increasingly require manufacturers to rethink their value chain configurations and geographical footprints. According to the survey by the World Economic Forum and Kearney, over 90% of leaders say they are prioritizing regionalization, while close to two-thirds plan to source the majority of their direct spending from a second source in a second region. Over 10 years ago, best-cost was the key factor in determining which countries played a significant role in global value chains. Now, according to senior operations and supply chain executives, a full range of country-level production readiness factors are becoming key differentiators in attracting investment in global value chains (see Appendix 1). These factors include: –Infrastructure –Resources and energy –Technology –Labour and skills –Fiscal and regulatory conditions –The geopolitical landscape –Environmental, social and governance This new manufacturing paradigm is a crucial evolution for the industry, underscoring the need for private and public stakeholders to work together to advance technology infrastructure, improve educational access and enhance regulatory agility.It is important to note, however, that these readiness factors alone do not guarantee a country’s status as a manufacturing destination. Other considerations, including cost, market access and political priorities, remain critical drivers in determining manufacturing attractiveness. Furthermore, the relevance and weight of these readiness factors can vary significantly depending on the unique goals, industry contexts and strategic priorities of individual companies, highlighting that no single factor holds universal significance across all situations. Reaping these rewards takes time. Achieving this goal will depend on much deeper collaboration between the public and private sectors, perhaps through technical committees, working groups and regulatory collaborations on capacity building and standards. In addition, countries that implement industrial policies and programmes that are synchronized with the production readiness factors outlined in this paper will have the potential to reinforce their positions as manufacturing leaders or establish themselves as new manufacturing hubs. Going forward, the World Economic Forum will continue to provide a neutral space and network for manufacturers from industry, the public sector, civil society and academia to successfully navigate these evolving market conditions and help showcase best practice industrial strategies. Together, this collaborative approach will enable manufacturing and supply chains to flourish well into the future, marking the sector as the driving force behind a new wave of global societal, economic and environmental prosperity. Beyond Cost: Country Readiness for the Future of Manufacturing and Supply Chains 25

Beyond Cost 2024