The cities shaping the future
By Ben Simpfendorfer, Matthew Tucker

May 19, 2026

Key Insights

  • Global manufacturing is being reconfigured as tariffs, technology, and industrial sovereignty drive reshoring and supply chain diversification efforts.
  • 65% of large-firm CEOs are strengthening continuity planning, with 44% planning to reconfigure supply chains.
  • Mexico and Vietnam are recent winners of diversification, but low-cost manufacturing clusters in Malaysia and India, nearshore locations in Morocco and Turkey, and industrial policies in Gulf cities have widened the suite of options.
  • The US is seeing reshoring in sectors like batteries, semiconductors, biotech, and defense, while Europe sees mixed reshoring and offshoring amid foreign investment.
  • China’s industrial hubs are advancing into AI-enabled manufacturing. Some leading firms are investing alongside Chinese peers to keep pace with tech change, while policy leaders should consider building bridges with Chinese cities.

Key Insights

  • Global manufacturing is being reconfigured as tariffs, technology, and industrial sovereignty drive reshoring and supply chain diversification efforts.
  • 65% of large-firm CEOs are strengthening continuity planning, with 44% planning to reconfigure supply chains.
  • Mexico and Vietnam are recent winners of diversification, but low-cost manufacturing clusters in Malaysia and India, nearshore locations in Morocco and Turkey, and industrial policies in Gulf cities have widened the suite of options.
  • The US is seeing reshoring in sectors like batteries, semiconductors, biotech, and defense, while Europe sees mixed reshoring and offshoring amid foreign investment.
  • China’s industrial hubs are advancing into AI-enabled manufacturing. Some leading firms are investing alongside Chinese peers to keep pace with tech change, while policy leaders should consider building bridges with Chinese cities.

Companies face a historic reconfiguration in supply footprints. Tariffs, technology, and the pursuit of industrial sovereignty are all reshaping manufacturing investments globally. American and European cities are seeing an influx of new industries, as some domestic businesses reshore operations while foreign companies invest to de-risk global operations. At the same time, Chinese industrial hubs are pivoting toward more advanced manufacturing while shifting some operations to cities across emerging markets, from India to Mexico, to strengthen their supply chain resilience.

Ongoing economic and political disruptions amplify the need for stronger supply chain resiliency. The Oliver Wyman Forum and New York Stock Exchange global CEO survey found that 65% of CEOs at the largest firms are strengthening business continuity and crisis management, with 45% planning to reconfigure supply chains and 41% deepening supply chain visibility beyond direct suppliers. For the largest organizations, preparedness has become a strategic discipline in its own right and requires rethinking a firm’s geographic supply footprint.

China’s supply chain challengers grow as businesses explore more locations

Companies have diversified their sourcing options for over a decade. To date, Mexico and Vietnam are the primary winners, capturing two percentage points of global export share for manufactured goods over the last 10 years. Vietnam’s Ho Chi Minh City, Hanoi, and Da Nang all benefit from good container port access, competitive labor costs, and proximity to China’s vast manufacturing base as a source of inputs. Mexico's Tijuana, Saltillo, and Guadalajara are attracting investment because of their close proximity to the American market, with key cities within a few days' road trip.

However, businesses must consider a wider set of locations, with two clear options emerging. The first involves new low-cost manufacturing clusters in cities such as Malaysia’s Johor Bahru or India’s Ahmedabad, as companies look beyond Vietnam and governments try to attract firms with developments such as the Johor-Singapore Special Economic Zone. The second is an opportunity to nearshore to cities such as Morocco’s Tangier or Turkey’s Bursa for the European market, to shorten delivery times and cut logistics costs.

Business leaders also should explore ways to take advantage of government industrial strategies. Gulf cities such as in Abu Dhabi, Riyadh, and Doha are developing transport infrastructure and new industrial zones to attract foreign investors looking for fast-growing domestic markets and wider regional markets, especially those for which low energy costs, tax incentives, or petrochemical inputs are key.

What business leaders are doing

Exhibit showing CEO priorities for 2026, with 45% of CEOs planning to reconfigure supply chains and 65% planningto strengthen crisis management.

65% of CEOs are strengthening business continuity and crisis management
45% of CEOs planning to reconfigure supply chains
41% of CEOs deepening supply chain visibility beyond direct suppliers
Source: The Oliver Wyman Forum x New York Stock Exchange CEO Agenda 2026

The rush is on to reshore and secure national economic sovereignty

Companies also are reshoring production to developed markets while others are investing there to improve market access and de-risk geopolitical tensions. A so-called Battery Belt is running through the American South as foreign companies make large investments in cities such as Greenville and Savannah. American, Korean, and Taiwanese semiconductor players have invested in Austin, Phoenix, and Dallas, attracted by their talent pools and business-friendly policies.

Other US cities are growing strategic sectors. Boston’s biotech corridor has seen a boom in biopharmaceutical manufacturing investments, while Greensboro’s expanding aerospace and defense clusters benefit from both public and private-sector spending. Overcoming talent shortages and complex regulations remains a challenge in non-strategic sectors, with only a handful of cities, such as Fort Worth and Charlotte, seeing growth in areas where policy subsidies are lower and competition with emerging markets is greater.

Business leaders also should consider their options in Europe given the continent’s similar worries about economic sovereignty and its surge in defense spending. Here, the data is less conclusive relative to the United States. The European Restructuring Monitor suggests that reshoring has slowed during the past year and was outpaced by offshoring. More important is foreign investment, including by Chinese players, in areas ranging from batteries to electric vehicles, usually in an effort to gain access to the local market.

New industrial investments vary by geography. The rapid increase in defense spending will spur investments in cities with related military or aerospace industries, such as Bordeaux, Lyon, Munich, and Oslo. Belgium’s Ghent and Spain’s Barcelona have received sizable investments in the automotive, chemicals, and renewables sectors. Hungary’s Debrecen and Bulgaria’s Plovdiv have captured investments in electronic component parts. Germany’s Berlin, Dusseldorf, and Frankfurt are also popular targets.

Distribution of top 250 cities in our connectivity rankings, by region and ranking tier

Source: Oliver Wyman Forum

China's industrial hubs are responding with advanced manufacturing and AI

Government leaders need to act, as Chinese cities are not standing still. From lithium batteries in Ningde and drones in Shenzhen to electrical vehicles in Hefei, Chinese cities are adopting more advanced manufacturing. It helps that many of the country’s top-ranking supply hubs specialize in both hardware and software, creating the right conditions for new industries to emerge. Industrial clusters are also key, with major players such as Shenzhen, Dongguan, and Guangzhou just 50 kilometers from each other.

The question is how the rise of artificial intelligence might change the global manufacturing footprint. China’s strategy of application-focused AI aims to embed artificial intelligence across all parts of the economy, including manufacturing. If AI is used to improve production efficiency or to produce more AI-enabled products, there is a chance that China’s more advanced industrial cities will continue to outperform, creating challenges for the other contenders, even under high tariff conditions.

The priority for CEOs, investors, and city leaders globally is how to both compete and engage with this change. Leading companies are investing alongside Chinese peers to ensure they remain at the forefront of technological change. Leading cities should consider building similar bridges with Chinese peers. Middle Eastern sovereign wealth funds, for instance, are engaging with Chinese city officials and investing in technologies that can help future-proof the urban environment at home.

The world's top 10 container ports

Volume 2024, million twenty-foot equivalent units (TEUs)
Source: World Shipping Council; Oliver Wyman Forum analysis

What business leaders are doing

Exhibit showing CEO priorities for 2026, with 45% of CEOs planning to reconfigure supply chains and 65% planningto strengthen crisis management.

65% of CEOs are strengthening business continuity and crisis management
45% of CEOs planning to reconfigure supply chains
41% of CEOs deepening supply chain visibility beyond direct suppliers
Source: The Oliver Wyman Forum x New York Stock Exchange CEO Agenda 2026

Companies face a historic reconfiguration in supply footprints. Tariffs, technology, and the pursuit of industrial sovereignty are all reshaping manufacturing investments globally. American and European cities are seeing an influx of new industries, as some domestic businesses reshore operations while foreign companies invest to de-risk global operations. At the same time, Chinese industrial hubs are pivoting toward more advanced manufacturing while shifting some operations to cities across emerging markets, from India to Mexico, to strengthen their supply chain resilience.

Ongoing economic and political disruptions amplify the need for stronger supply chain resiliency. The Oliver Wyman Forum and New York Stock Exchange global CEO survey found that 65% of CEOs at the largest firms are strengthening business continuity and crisis management, with 45% planning to reconfigure supply chains and 41% deepening supply chain visibility beyond direct suppliers. For the largest organizations, preparedness has become a strategic discipline in its own right and requires rethinking a firm’s geographic supply footprint.

China’s supply chain challengers grow as businesses explore more locations

Companies have diversified their sourcing options for over a decade. To date, Mexico and Vietnam are the primary winners, capturing two percentage points of global export share for manufactured goods over the last 10 years. Vietnam’s Ho Chi Minh City, Hanoi, and Da Nang all benefit from good container port access, competitive labor costs, and proximity to China’s vast manufacturing base as a source of inputs. Mexico's Tijuana, Saltillo, and Guadalajara are attracting investment because of their close proximity to the American market, with key cities within a few days' road trip.

However, businesses must consider a wider set of locations, with two clear options emerging. The first involves new low-cost manufacturing clusters in cities such as Malaysia’s Johor Bahru or India’s Ahmedabad, as companies look beyond Vietnam and governments try to attract firms with developments such as the Johor-Singapore Special Economic Zone. The second is an opportunity to nearshore to cities such as Morocco’s Tangier or Turkey’s Bursa for the European market, to shorten delivery times and cut logistics costs.

Business leaders also should explore ways to take advantage of government industrial strategies. Gulf cities such as in Abu Dhabi, Riyadh, and Doha are developing transport infrastructure and new industrial zones to attract foreign investors looking for fast-growing domestic markets and wider regional markets, especially those for which low energy costs, tax incentives, or petrochemical inputs are key.

The world's top 10 container ports

Volume 2024, million twenty-foot equivalent units (TEUs)
Source: World Shipping Council; Oliver Wyman Forum analysis

Companies face a historic reconfiguration in supply footprints. Tariffs, technology, and the pursuit of industrial sovereignty are all reshaping manufacturing investments globally. American and European cities are seeing an influx of new industries, as some domestic businesses reshore operations while foreign companies invest to de-risk global operations. At the same time, Chinese industrial hubs are pivoting toward more advanced manufacturing while shifting some operations to cities across emerging markets, from India to Mexico, to strengthen their supply chain resilience.

Ongoing economic and political disruptions amplify the need for stronger supply chain resiliency. The Oliver Wyman Forum and New York Stock Exchange global CEO survey found that 65% of CEOs at the largest firms are strengthening business continuity and crisis management, with 45% planning to reconfigure supply chains and 41% deepening supply chain visibility beyond direct suppliers. For the largest organizations, preparedness has become a strategic discipline in its own right and requires rethinking a firm’s geographic supply footprint.

What business leaders are doing

Exhibit showing CEO priorities for 2026, with 45% of CEOs planning to reconfigure supply chains and 65% planningto strengthen crisis management.

65% of CEOs are strengthening business continuity and crisis management
45% of CEOs planning to reconfigure supply chains
41% of CEOs deepening supply chain visibility beyond direct suppliers
Source: The Oliver Wyman Forum x New York Stock Exchange CEO Agenda 2026

China’s supply chain challengers grow as businesses explore more locations

Companies have diversified their sourcing options for over a decade. To date, Mexico and Vietnam are the primary winners, capturing two percentage points of global export share for manufactured goods over the last 10 years. Vietnam’s Ho Chi Minh City, Hanoi, and Da Nang all benefit from good container port access, competitive labor costs, and proximity to China’s vast manufacturing base as a source of inputs. Mexico's Tijuana, Saltillo, and Guadalajara are attracting investment because of their close proximity to the American market, with key cities within a few days' road trip.

However, businesses must consider a wider set of locations, with two clear options emerging. The first involves new low-cost manufacturing clusters in cities such as Malaysia’s Johor Bahru or India’s Ahmedabad, as companies look beyond Vietnam and governments try to attract firms with developments such as the Johor-Singapore Special Economic Zone. The second is an opportunity to nearshore to cities such as Morocco’s Tangier or Turkey’s Bursa for the European market, to shorten delivery times and cut logistics costs.

Business leaders also should explore ways to take advantage of government industrial strategies. Gulf cities such as in Abu Dhabi, Riyadh, and Doha are developing transport infrastructure and new industrial zones to attract foreign investors looking for fast-growing domestic markets and wider regional markets, especially those for which low energy costs, tax incentives, or petrochemical inputs are key.

The world's top 10 container ports

Volume 2024, million twenty-foot equivalent units (TEUs)
Source: World Shipping Council; Oliver Wyman Forum analysis

The rush is on to reshore and secure national economic sovereignty

Companies also are reshoring production to developed markets while others are investing there to improve market access and de-risk geopolitical tensions. A so-called Battery Belt is running through the American South as foreign companies make large investments in cities such as Greenville and Savannah. American, Korean, and Taiwanese semiconductor players have invested in Austin, Phoenix, and Dallas, attracted by their talent pools and business-friendly policies.

Other US cities are growing strategic sectors. Boston’s biotech corridor has seen a boom in biopharmaceutical manufacturing investments, while Greensboro’s expanding aerospace and defense clusters benefit from both public and private-sector spending. Overcoming talent shortages and complex regulations remains a challenge in non-strategic sectors, with only a handful of cities, such as Fort Worth and Charlotte, seeing growth in areas where policy subsidies are lower and competition with emerging markets is greater.

Business leaders also should consider their options in Europe given the continent’s similar worries about economic sovereignty and its surge in defense spending. Here, the data is less conclusive relative to the United States. The European Restructuring Monitor suggests that reshoring has slowed during the past year and was outpaced by offshoring. More important is foreign investment, including by Chinese players, in areas ranging from batteries to electric vehicles, usually in an effort to gain access to the local market.

New industrial investments vary by geography. The rapid increase in defense spending will spur investments in cities with related military or aerospace industries, such as Bordeaux, Lyon, Munich, and Oslo. Belgium’s Ghent and Spain’s Barcelona have received sizable investments in the automotive, chemicals, and renewables sectors. Hungary’s Debrecen and Bulgaria’s Plovdiv have captured investments in electronic component parts. Germany’s Berlin, Dusseldorf, and Frankfurt are also popular targets.

Distribution of top 250 cities in our connectivity rankings, by region and ranking tier

Source: Oliver Wyman Forum

China's industrial hubs are responding with advanced manufacturing and AI

Government leaders need to act, as Chinese cities are not standing still. From lithium batteries in Ningde and drones in Shenzhen to electrical vehicles in Hefei, Chinese cities are adopting more advanced manufacturing. It helps that many of the country’s top-ranking supply hubs specialize in both hardware and software, creating the right conditions for new industries to emerge. Industrial clusters are also key, with major players such as Shenzhen, Dongguan, and Guangzhou just 50 kilometers from each other.

The question is how the rise of artificial intelligence might change the global manufacturing footprint. China’s strategy of application-focused AI aims to embed artificial intelligence across all parts of the economy, including manufacturing. If AI is used to improve production efficiency or to produce more AI-enabled products, there is a chance that China’s more advanced industrial cities will continue to outperform, creating challenges for the other contenders, even under high tariff conditions.

The priority for CEOs, investors, and city leaders globally is how to both compete and engage with this change. Leading companies are investing alongside Chinese peers to ensure they remain at the forefront of technological change. Leading cities should consider building similar bridges with Chinese peers. Middle Eastern sovereign wealth funds, for instance, are engaging with Chinese city officials and investing in technologies that can help future-proof the urban environment at home.

About the authors

Ben Simpfendorfer is a partner at Oliver Wyman, based in Hong Kong. He also leads the Oliver Wyman Forum’s work across Asia Pacific, and works across a range of practices, including geopolitics, public policy, finance, and risk. He also drives the firm’s Asia-Middle East corridor initiatives.

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Matthew Tucker is a partner in Oliver Wyman’s Private Capital practice, based in London. With close to 20 years of experience working across private equity, financial and business services, and fintech, Matt brings extensive and varied expertise that enables him to support investors and entrepreneurs throughout every stage of the investment lifecycle.

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