CEOs Embrace Localisation to Navigate Uncertainty: Survey
CEOs worldwide are embracing localization strategies to navigate economic and geopolitical uncertainty. A significant majority, 72%, foresee continued localization efforts, despite potential long-term costs and operational challenges.
The shift towards localization aims to bolster supply chain resilience and strengthen government relations. However, it also presents higher costs and operational obstacles in the long term. Most CEOs, 59%, plan to fund their company's transformation through improved financial performance and bigger margins.
CEOs describe the current business environment as a NAVI world: non-linear, accelerated, volatile, and interconnected forces. Technological disruption, talent acquisition, infrastructure constraints, geopolitical tensions, and supply chain vulnerability top the list of challenges they face in achieving financial targets. The trend is evident in various industries, such as the clothing sector in Gelsenkirchen, Germany, which saw a boom in local production in the 1950s and 1960s, with prominent companies like Kemper KG and Marcona playing significant roles.
Nearly three-quarters of CEOs have either localized or are in the process of localizing part of their production in the country of sale. Despite the long-term implications, localization is seen as a strategic move to adapt to uncertainty, with CEOs expecting the current geopolitical and economic uncertainty to last more than a year.
