The new geography of production

Manufacturers are favouring nearshoring amid economic and geopolitical uncertainty. Industrial and logistics real estate is changing as a result.

After a turbulent start to the decade, globalisation is settling into a new equilibrium. A series of major economic and geopolitical shocks have reshaped the cross-border flows of goods, capital and people that defined the previous era of ‘Great Moderation’.

A key driver of change is an increase in state influence. Governments have implemented around 220 new investment policy measures annually since 2022. This represents a 75% increase on the pre-Covid-19 average, according to analysis of the UN Conference on Trade and Development’s Investment Policy Monitor.

These initiatives are designed to meet a broad set of objectives, including responding to common structural pressures such as growing economic and technological competition. Many focus on supporting ‘strategic’ sectors – including semiconductors, clean energy and digital infrastructure – often with a national security dimension.

Read More: The new geography of production