A winning strategy for industrial firms in asymmetric globalization

Industrial firms face asymmetric globalization as governments reshape competition; leaders win by regionalizing value chains, building resilience, and modernizing talent.

In brief

• Governments are reshaping the landscape and industrial leaders can win by shifting from defense to offense in asymmetric globalization.
• Three moves drive outperformance: regionalize value chains, build resilience-led operations, and modernize talent with automation/AI.

The rules of global business are being rewritten in real time. Governments have shifted from setting up the backdrop for competition to actively shaping it — using tariffs, export controls, subsidies and investment screens as strategic tools, even with longstanding allies. Rising tensions, conflict and nationalism are accelerating policy whiplash and injecting new volatility and unpredictability into markets.

The performance case for acting now 

Disruption isn’t just a challenge — it’s an opening to unlock meaningful upside. Advantage now goes to leaders who record their risk posture and rewire their operating model to exploit uneven conditions, treating volatility as fuel. EY research shows that companies that move decisively outperform those that remain defensive:

• More than 70% of companies that implemented one or more of the three strategic initiatives — regionalized value chains, resilience led operating models or advanced talent models — outperformed the S&P 500 Industrials Index by over 7% (on average) in revenue growth in the following year.
  
  
• 90% of companies that implemented all three initiatives outperformed the index by an average of 8% in revenue growth and 16% in TSR over the same period.

These results reinforce a clear message: In an asymmetric world, advantage accrues to leaders who step forward with an offense first, opportunity driven mindset and convert the same volatility into a source of differentiation.

Proof in practice: leaders moving first

A growing number of forward leaning industrial companies are shifting from defensive postures to offensive strategies — reshaping operating models through advanced technologies, alternative talent models and deeper regional footprints to convert geopolitical uncertainty into sustained growth.

The common thread is unmistakable: these leaders refuse to play defense. By acting with confidence, speed and decisiveness, they are turning geopolitics from a headwind into a competitive edge and positioning themselves to lead the next era of industrial performance.

Preparing for multiple futures in an asymmetric world 

In addition to moving rapidly and decisively to gain a competitive advantage, industrial players will also need to identify their operating landscape and prepare for wide range of geopolitical scenarios — as outlined in EY Future of globalization article. Organizations face multiple, overlapping futures under asymmetric globalization — from renewed international collaboration requiring flexible cross border supply chains (neo-globalism), to regionalization favoring localized production and automation led growth (regionalization), to bloc isolationism and self reliance demanding stronger compliance, diversified sourcing, reshoring and investment in domestic talent. 

Across all scenarios, success hinges on the ability to adapt operating models, governance and talent strategies to rising fragmentation, regulatory divergence and uneven access to markets and resources. Regardless of what scenarios hold true, leaning forward and unlocking upside opportunity will remain a winning strategy for any firm. 

Call to action: how you can win now

1. Rewire the operating model, not just the footprint: 

Regionalization requires more than moving production. Leaders must actively simplify portfolios, reset governance and realign capital to match regional realities — or risk locking in complexity and exposure that competitors are already shedding.

2. Turn resilience into a commercial advantage: 

Resilience is no longer a back‑office concern. Regionally anchored, reliable operations enable faster market access, stronger customer trust and pricing power in volatile environments. Firms that treat resilience as insurance will fall behind those that use it to grow.

3. Redesign work to break the talent constraint: 

Labor scarcity is structural, not cyclical. Leaders must rethink how work gets done — concentrating scarce knowledge, automating at scale and deploying AI‑enabled augmentation — to decouple growth from headcount and sustain execution under pressure.

The views reflected in this article are the views of the author(s) and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.

This article is co-authored by Sweta Gupta. Narain Murthy also contributed to this article.