• Supply chains are diversifying, not deglobalising
• EM advantages now extend well beyond labour and commodities
• Durable winners will build capacity, skills and domestic value
• Greater dispersion may strengthen the case for active allocation

Global supply chains are being reconfigured as geopolitical tensions, industrial policy and economic security considerations reshape trade and investment flows. This is not deglobalisation. Production is becoming more regional, more diversified, and increasingly concentrated around strategic industries.

For emerging markets, the implications extend well beyond manufacturing. The countries best positioned to benefit are those building industrial capacity, strengthening supplier ecosystems, and moving up the value chain. For investors, these shifts are creating greater differentiation across countries, sectors, and asset classes, reinforcing the importance of active allocation.