The shift from cost-efficiency to strategic resilience is rewriting capital allocation decisions across heavy industry, here's what it means for vendors selling into the new manufacturing landscape.
The word "deglobalization" has been overused and largely wrong. Global trade hasn't retreated, it reached record levels in 2025, even as geopolitical tensions, tariff walls, and supply chain fractures multiplied. What has changed, as the World Economic Forum's Ronald O'Hanley argued at Davos in January 2026, is not the volume of global integration but its architecture. The current phase of reglobalization is ushering in a realignment of trade, production, and financial networks driven by resilience and security, a multi-nodal, regionally and politically clustered network that still operates on a global scale, but with resilience and security prioritized alongside cost and efficiency. For industrial manufacturers and the vendors supplying their capital equipment, digital infrastructure, and engineering services, that architectural shift is not a backdrop. It is the operating condition.
THE NUMBERS BEHIND THE STRATEGIC SHIFT
Nearly three-quarters of large European and US organizations now have a reindustrialization strategy in place or in development, reflecting a clear shift toward resilience and control-first operating models. That figure, from Capgemini Research Institute's April 2026 report surveying 1,300 senior executives from organizations with revenues above $1 billion, is the headline. The detail beneath it matters more for commercial planning.
Reshoring activities in the US show an acceleration, with nearly half (48%) of organizations reporting investments, up from 30% in 2025, while a significant 42% continue to invest in nearshoring. In continental Europe, friendshoring is cited by 64% of organizations, a clear shift toward allied-based manufacturing and supply chains to manage strategic dependencies. These aren't aspirational survey responses. They represent capital already committed to new or reconfigured production facilities in domestic and near-allied geographies.
As US and EU organizations rebalance from China, they are increasing their presence in India, followed closely by Vietnam, Mexico, and Canada, underscoring a broader reconfiguration of global manufacturing geography. For heavy industry vendors with distribution networks calibrated to the previous supply chain architecture, this geographic rotation is a sales territory problem as much as a supply chain one. The procurement decision-making for a new facility in Tamil Nadu or Monterrey operates under different frameworks, timelines, and stakeholder structures than the same decision made in Stuttgart or Ohio.
Capgemini's research projects total reindustrialization investment by European and US organizations at $3.4 trillion over the next three years, representing an average allocation of 8.7% of revenue. That investment scale creates procurement cycles at a frequency and volume that the industrial sector hasn't seen in a generation. The question for vendors is whether their commercial infrastructure is positioned to participate.
TECHNOLOGY AS THE COST OFFSET — NOT AN OPTIONAL ADD-ON
Reshoring introduces an economics problem. Domestic production in North America or Western Europe costs more than offshore production, in labour, in energy, in regulatory compliance. The only viable path to maintaining margin while reshoring is automation at a scale and speed that previous investment cycles didn't require. Newly built or modernised facilities are being designed with advanced automation, robotics, and digital control systems from the outset, relying heavily on integrated data platforms and AI to maintain competitiveness despite higher baseline expenses.
This has created what analysts are calling an OT modernisation super-cycle. With approximately 50% of industrial operational technology assets now over 11 years old, a wholesale replacement cycle is underway, not for incremental efficiency gains, but to install hardware with embedded cybersecurity, AI-ready controllers, and the connectivity architecture that agentic automation requires. The new industrial facilities taking shape are capital-intensive, highly automated environments where human workers are orchestrating complex cyber-physical systems, closer in character to a software operation than to a traditional assembly line.
Among executives deploying brownfield reindustrialization strategies, 28% have begun facility upgrades within the past year. Digital technologies are critical enablers: 68% of executives are confident that reindustrialization can drive innovation and technical advancement, and organisations plan extensive use of AI, machine learning, automation, 5G/edge, generative AI, and digital twins in their reindustrialization efforts.
Agentic AI is the specific capability attracting the most investment in newly reshored facilities. These are systems that autonomously manage supply chain risks, identify and engage alternative suppliers when primary sources become geopolitically exposed, and optimise production scheduling in real time across multi-site operations. The US Air Force has already demonstrated how AI can help operators make faster decisions in complex environments, a pattern that industrial procurement is now applying directly to factory floor and supply chain orchestration (Deloitte Aerospace and Defense Outlook, 2026). For vendors of industrial automation, the question is no longer whether a buyer wants agentic capability. It's whether the legacy OT infrastructure on the factory floor can support it.
THE SUSTAINABILITY LAYER IS STRUCTURAL, NOT OPTIONAL
For industrial manufacturers, Davos 2026 made clear that operational decisions must now take geopolitical risk, supply chain security, and strategic priorities into account simultaneously, trade policies and tariffs are increasingly wielded as tools of geopolitical leverage rather than economic optimisation alone. The carbon dimension of that leverage is the EU Carbon Border Adjustment Mechanism, which entered its transitional phase in 2023 and begins full financial effect in 2026. CBAM effectively prices the carbon intensity of imported goods at the EU border, creating a direct cost advantage for manufacturers producing domestically with lower emissions intensity.
A majority of executives are optimistic that reindustrialization will help their organisations meet climate goals, particularly in reducing Scope 3 greenhouse gas emissions, and 56% believe reindustrialization will drive a shift towards sustainable manufacturing. That's not altruism. It's the recognition that lower-carbon domestic production is structurally advantaged under CBAM, and that Scope 3 visibility requires the kind of supply chain shortening that reshoring and nearshoring provide.
The energy agility dimension is emerging as a margin-protection tool rather than an environmental initiative. Manufacturers adopting phased electrification roadmaps, running energy-intensive processes when renewable grid supply is abundant and pausing or reducing production during price spikes, are using energy management as a direct EBITDA lever. In markets where grid carbon intensity and energy price volatility are both high, this capability is worth quantifying against a specific account's energy cost structure before any other technology conversation.
THE CONNECTOR ECONOMY OPPORTUNITY
Many so-called connector economies, such as Mexico and Vietnam, import intermediate goods, assemble or process them, and export finished products to the US or Europe. Research from the Bank of International Settlements shows that trade between countries in opposing geopolitical camps has grown more slowly than trade within those camps, while intra-bloc investment and friend-shoring has held up.
This dynamic creates a specific commercial opportunity for heavy industry vendors. The connector economies absorbing diverted manufacturing investment, Mexico, India, Vietnam, Poland, Morocco, are installing new production capacity at scale, often for the first time at industrial quality levels. Their procurement requirements for capital equipment, automation infrastructure, process control systems, and digital twins are immediate and large. They also lack the incumbent vendor relationships that make penetration more difficult in mature industrial markets. For vendors with the geographic reach and the product certification credentials to operate in these emerging hubs, the timing advantage of the next 18 to 36 months is significant.
WHAT THE SALES CONVERSATION LOOKS LIKE NOW
The reindustrialization buyer is structurally different from the maintenance and upgrade buyer that has dominated industrial procurement for the past decade. A greenfield or near-greenfield facility being built for resilience rather than lowest-cost production is making technology decisions that will define its competitive position for 20 years. The decision criteria are different: security of supply, OT cybersecurity posture, digital twin compatibility, AI-readiness of the control architecture, and carbon reportability under CSRD and CBAM.
The proportion of the manufacturing workforce with advanced digital skills is projected to rise from 31% today to 53% in the next three years, and 72% of executives say reindustrialization will create demand for a more skilled manufacturing workforce. For vendors selling training infrastructure, operator assist systems, or digital work instruction platforms, that workforce development requirement is a concurrent procurement cycle running alongside the capital equipment spend.
More than 500 US manufacturers identify four priorities for reindustrialization: building a skilled workforce, applying total cost of ownership principles, managing costs, and preparing for geopolitical risk. Each of those four priorities maps to a specific vendor category. Total cost of ownership analysis, which accounts for energy costs, maintenance cycles, downtime exposure, and compliance costs alongside purchase price, is the framing that consistently wins procurement committee decisions in reindustrialization projects, where lowest-upfront-cost bids are structurally disadvantaged against resilience-weighted evaluation criteria.
KEY TAKEAWAYS
- Nearly three-quarters of large European and US organisations have a reindustrialization strategy in place, backed by a projected $3.4 trillion in investment over the next three years. This is the largest capital equipment procurement cycle the industrial sector has seen in a generation, vendor positioning decisions made now will determine market share for the next decade.
- US reshoring investment nearly doubled year-on-year (30% to 48%), while European friendshoring is now the dominant model at 64%. India, Vietnam, Mexico, and Canada are the primary new manufacturing geography destinations. Sales territories and distribution networks calibrated to the previous supply chain architecture need recalibration now.
- The OT modernisation super-cycle, driven by 50% of industrial assets being over 11 years old, is a hardware replacement cycle that runs concurrently with the reshoring investment cycle. Vendors offering AI-ready controllers, embedded cybersecurity, and agentic automation compatibility are positioned at the primary procurement decision point.
- The EU Carbon Border Adjustment Mechanism creates a direct structural cost advantage for lower-carbon domestic production. For any vendor serving European industrial buyers, the ability to quantify the CBAM cost impact on a client's current production geography is a commercially differentiating capability in procurement conversations.
- Connector economies, Mexico, India, Vietnam, Poland, Morocco, are absorbing large volumes of diverted manufacturing investment at scale and often lack incumbent vendor relationships. The 18–36 month window for establishing positions in these emerging industrial hubs is the clearest near-term commercial opportunity in the reindustrialization cycle.
- Total cost of ownership is the winning commercial framework for reindustrialization procurement. Lowest-upfront-cost proposals are structurally disadvantaged in resilience-weighted evaluation criteria. Build the TCO case, including energy costs, downtime exposure, compliance costs, and workforce skill requirements, before the first formal proposal.
- Workforce digital skills investment is a concurrent procurement cycle. The projected rise from 31% to 53% of the manufacturing workforce holding advanced digital skills within three years creates active procurement for operator assist systems, digital work instruction platforms, and training infrastructure alongside capital equipment.
SOURCES
- "Reglobalization: Rewiring the World Economy for a New Era of Growth" - World Economic Forum, Ronald P. O'Hanley, weforum.org/stories/2026/01/reglobalization-world-economy-growth, January 12, 2026
- "Changes in World Production under Deglobalization" - ANBOUND Research, Kung Chan and He Jun, anbound.com/Section/ArticleView_33013_1.htm, January 12, 2024
- "What is Reshoring?" - TechTarget / SearchCIO, Rachel Lebeaux, techtarget.com/searchcio/definition/reshoring, January 26, 2024
- "Onshoring: Why U.S. Manufacturing is Coming Home" - Top10ERP, top10erp.org/blog/onshoring-manufacturing, 2026
- "Davos 2026: What Global Trade, Geopolitics, and AI Debates Mean for Industrial Manufacturing" - Copperberg, Radiana Pit, copperberg.com/davos-2026-global-trade-geopolitics-and-ai-debates, February 5, 2026
- "Reindustrialization of Europe and US 2026 - Executive Summary" - Capgemini Research Institute, capgemini.com/wp-content/uploads/2024/03/Final-Web-Version-Report-Reindustrialization.pdf, 2024 (base data); April 2026 update
- "Reindustrialization Moves into a More Selective, Strategic Phase in Europe and the US" - Capgemini / GlobeNewswire, globenewswire.com/news-release/2026/04/20/3277266, April 20, 2026
- "Reindustrialization of Europe and US 2026 - Report Landing Page" - Capgemini Research Institute, capgemini.com/insights/research-library/reindustrialization-of-europe-and-us-2026, April 2026
- "Smart Manufacturing Trends 2026: AI, IoT, and Automation" - RTInsights, rtinsights.com/smart-manufacturing-trends-2026-how-ai-iot-and-automation-are-driving-efficiency-and-resilience, May 2026
- "The Coming Reindustrialization: AI, the Education Reckoning, and the Return of Production as Strategic Power" - Second Line of Defense, sldinfo.com/2026/04/the-coming-reindustrialization-ai-the-education-reckoning-and-the-return-of-production-as-strategic-power, April 2026
- "Reshoring and the Future of U.S. Manufacturing" - AMT / Association For Manufacturing Technology, amtonline.org/article/reshoring-and-the-future-of-u-s-manufacturing, January 23, 2026
- "2026 Manufacturing Trends: AI, Reshoring and PE" - Ryan & Wetmore / BDO Alliance, ryanandwetmore.com/insights/2026-manufacturing-trends-ai-reshoring-pe, February 24, 2026
- "2026 Aerospace and Defense Industry Outlook" - Deloitte Insights, deloitte.com/us/en/insights/industry/aerospace-defense/aerospace-and-defense-industry-outlook.html, December 24, 2025