WEBVTT

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<v ->As geopolitical competition intensifies,</v>

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industrial policy resurges

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and supply chains get reconfigured.

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Governments increasingly
are using the tools

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of economic statecraft,
tariffs, export controls,

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ownership caps, and local
content rules to reshape markets

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and try to protect the key sectors.

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Government subsidies to industry
have also soared over the

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past decade, reaching more
than $100 billion annually

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across 15 sectors.

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These government actions
can introduce complexity

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or open windows of opportunity.

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Either way, it's crucial for stakeholders

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to pinpoint the sectors

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where governments are
most likely to act next.

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Using a proprietary assessment framework,

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BCG has identified mission critical
sectors whose structural

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characteristics leave them particularly

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exposed to state involvement.

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The most mission critical
sectors include semiconductors,

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critical minerals, batteries,
aerospace, and biopharma.

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These five sectors rank
highly on two dimensions.

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First, they all have high national

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and economic security importance.

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Second, these sectors
are especially vulnerable

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to supply chain disruptions
due to geographic concentration

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and substitution difficulties.

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Semiconductors, for instance,

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play an essential role in
everything from data processing

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and AI to automotive manufacturing

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and defense, yet they
are fabricated mainly in

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just a few locations.

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Similarly, the top three producers

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of active pharmaceutical
ingredients account

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for over 70% of global exports.

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BCG helps companies capture opportunities

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and manage risks created
by rising security concerns

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and the government actions
reshaping cross-border commerce.

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Our mission critical sector
tool lets companies identify

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disruption risks and discover
investment opportunities.

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Leaders can use these insights

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to make global supply
chains more resilient,

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adapt their broader business
models to gain advantages,

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and become better prepared
for future policy shifts.