Two-thirds of manufacturers are adopting a ‘power of two’ approach – ensuring spending is sourced from two separate regions – as they navigate global supply chain disruptions, according to a World Economic Forum report.
In a 300-organisation survey, together with Kearney, it found over 90% are undertaking a ‘renewed focus on regionalisation’.
It identified seven readiness factors as countries prepare their systems for future manufacturing, covering infrastructure, energy and resources, technology, labour and skills, fiscal and regulatory policies, geopolitical landscape, and environmental, social and governance (ESG).
Additional drivers, including cost, market access and political priorities, play significant roles in determining manufacturing attractiveness.
The report notes the need for ‘much deeper collaboration’ between public and private sectors, and countries that implement industrial policies and programmes that are synchronised with ‘production readiness factors’ will reinforce their positions as manufacturing leaders.
“The continued pressure exerted by global megatrends will increasingly require manufacturers to rethink their value chain configurations and geographical footprints,” the report concludes.
The UAE was cited in a case study on public sector intervention, where a suite of demand-side policies focused on energy efficiency in the industrial sector seek to position the Gulf state as a leader in sustainable manufacturing. It recently awarded $2bn-worth of EPC contracts to develop a new chemicals port and low-carbon supply chain.
Read more: UAE targets green ammonia growth with new chemicals port
An 1895 podcast reviewing the recent MENA Industrial Gases Conference in Abu Dhabi is now available online.
