The resurgence of manufacturing

The resurgence of manufacturing: Reindustrialization of Europe and the US – 2026, the third edition of the Capgemini Research Institute’s annual research, examines how organizations are reshaping manufacturing and supply chain strategies in an increasingly volatile global environment. Since 2024, repeated disruptions – from pandemic-related impacts and geopolitical conflict to rising energy challenges – have accelerated a shift from short-term cost efficiency toward resilience, sovereignty, and strategic control.

In 2026, nearly three-quarters of organizations have a reindustrialization strategy in place or under development. However, despite strong strategic intent, planned investments – outside highly strategic areas such as semiconductors and defense – have declined amid policy and tariff uncertainty, bleak economic climate, and tighter capital allocation. This report explores how reindustrialization strategies are evolving across regions and how technology is accelerating industrial transformation.

The research draws on a survey of more than 1,200 senior executives across 13 sectors and 11 countries in Europe and the US, complemented by in-depth executive interviews. Key findings include:

• Reindustrialization intent remains high, but investment is increasingly selective. Organizations continue to prioritize resilience and risk mitigation, while adopting more pragmatic, capital-efficient approaches rather than broad reshoring initiatives.
• Europe and the US are taking different paths. In the US, federal policies, tariffs, and incentives are driving domestic production and attracting non-US investment. In Europe, higher energy prices, labor costs, and fragmented regulation are pushing organizations toward friendshoring.
• New global manufacturing hubs are gaining prominence. Most organizations are taking a pragmatic approach to China by rebalancing operations rather than exiting abruptly. As organizations look to rebalance and reconfigure their supply chains around diversified ecosystems, they are increasing their presence in India in 2026, followed closely by Vietnam, Mexico, and Canada.  
• Technology, especially AI is a critical enabler – but talent remains a constraint. AI/Gen AI, digital twins, automation, robotics, IIoT, and edge computing are improving productivity, flexibility, and resilience, particularly in tech-intensive greenfield factories. However, shortages of skilled industrial and digital talent are limiting scale.
   

This reportis essential for business and technology leaders across manufacturing, operations, supply chain, procurement, R&D and innovation, finance, and human resources, as well as CEOs, policymakers, investors, and analysts seeking a holistic view of reindustrialization.

To succeed amid geopolitical uncertainty, supply chain volatility, and tighter capital constraints, organizations must:

• Use a holistic value framework balancing cost, resilience, and competitiveness to evaluate reindustrialization decisions
• Adopt hybrid rightshoring strategies to optimize capital utilization and strengthen operational sovereignty
• Build adaptive and digitally-native manufacturing systems
• Harness sustainable manufacturing to strengthen industrial resilience
• Invest in hybrid workforce skills and foster effective human-AI teaming

To explore how organizations are rebalancing resilience, cost, and competitiveness across Europe and the US, download the report today.