Boston Consulting Group Report Examines AI's Role in Reshaping Global Manufacturing
Boston Consulting Group and the BCG Institute announced in a press release a new report titled How the Factory of the Future Is Reshaping the Economics of Manufacturing. The study finds that AI-enabled factory technologies could increase productivity by as much as 60%, creating new patterns of competitiveness in global manufacturing.
The report combines a global survey of 1,000 manufacturers with quantitative analysis to show how AI, automation, and digital systems are transforming production. It suggests that upgrading to advanced manufacturing capabilities in higher-cost countries can now be more competitive than offshoring, even when lower-cost countries adopt similar technologies. Without such upgrades, $1.03 trillion of manufacturing value in Western Europe and $440 billion in the United States are at risk of relocation.
The analysis highlights that competitiveness now depends on how effectively production systems are redesigned and deployed. Factors influencing outcomes include energy and labor costs, automation potential, logistics share, and digital infrastructure readiness. Sectors such as food and beverages, where logistics costs are high, stand to gain the most from proximity to end markets.
According to the survey, 87% of manufacturers said access to skilled talent is critical for sustaining advanced manufacturing deployment, while 69% emphasized the importance of digital infrastructure. BCG notes that companies aligning technology deployment with location strategy will be better positioned to compete in the coming decade.
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