The Intelligent Tangible World
We have published a White Paper on the Rise of Intelligent Tangibles, which is the fusion of physical assets and intelligence. Intelligent Tangibles will drive the coming industrial revolution and the manufacturing renaissance of the West.
The multi-decade development of globalization is reversing, and the implications are broad and profound. We have explored the consequences from the point of view of the industrial economy: The massive shift in global production chains has ramifications for countries, companies, and the emergence of new themes.
To grasp this, one must first revisit the developments of the last 20 years to appreciate the magnitude of the reversal that we foresee. While this has been discussed for some time, the tectonic plates have started moving. There are tentative signs that the reversal of outsourcing to China is happening. We examine labor data, company investment intentions, and actual corporate spending trends. We note that last year was the first time we saw companies in our global strategy change long-term guidance based on the geopolitical changes we expect.
We are seeing a new capex cycle driven by deglobalization and technology. We explore how the US, China, and Europe face divergent prospects from this trend. A particular focus is on the US, the country we see as the net beneficiary of this transition. China, perhaps surprising to some – is also well-placed. Although we are less optimistic about Europe from a top-down perspective, paradoxically, many companies that will likely be winners of this shift are listed in Europe. While the country factor will be making a comeback, partly due to politics, what matters is geographical revenue exposure.
We discuss how manufacturing in the future will be different and the drivers behind this. We introduce the concept of “Intelligent Tangibles” – the merging of the physical hardware needed in production with software as a new theme and the inevitable need for increased use of commodities to make the shift happen.
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We will combine the key takeaways from the thematic shifts with the best business models to highlight some key companies and themes we believe will benefit in this new era.
You can access the report via the link; I hope you find it interesting, and I look forward to any comments!