British companies will invest £338 billion in reindustrialisation over the next three years, according to research

In a bid to strengthen supply chains and rejuvenate domestic manufacturing, British companies are poised to inject as much as £338 billion into reindustrialization initiatives over the next three years.

Research by professional services provider Capgemini shows that there has been a substantial increase in investments, as a result of a strategic shift towards strengthening national resilience and competitiveness.

According to the research, which surveyed 200 supply chain and manufacturing managers at UK companies generating more than $1 billion in revenue, the re-shoring journey is gaining momentum. While only a quarter of companies had recently modernized their production facilities, a striking 78% of respondents reported formulating or actively developing reindustrialization strategies.

Key drivers behind this transformative wave include national security concerns, with more than two-thirds of executives considering improving domestic manufacturing capacity as imperative. Furthermore, the expected benefits extend beyond resilience, with executives envisioning competitive advantages and sustainability gains from reindustrialization efforts.

Against the backdrop of a global manufacturing landscape characterized by geopolitical tensions and supply chain vulnerabilities, Western economies, including the United Kingdom, are turning to industrial strategies. Although Britain has fallen behind in terms of policy initiatives compared to countries such as the US and EU, the research underlines a growing consensus among businesses for stronger government intervention to support reindustrialisation efforts.

Crucially, the study highlights the crucial role of workforce development in realizing the full potential of reindustrialization. With two-thirds of executives surveyed calling for more highly skilled workers, human capital investments are emerging as a linchpin for supporting and maximizing the impact of reindustrialization initiatives.

As UK businesses prepare for a transformative period of reindustrialisation, the research underlines the strategic need to strengthen national capabilities and leverage competitive advantages in an increasingly complex global landscape.