
Conditions Shaping the Future Introduction Manufacturing and product companies today face a landscape marked by regulatorycomplexity, supply chain disruptions, economic headwinds, and rapid technological Against this backdrop, understanding the priorities and barriers shaping product Arena by PTC, a leader in cloud-native product lifecycle management (PLM) and qualitymanagement system (QMS) solutions, commissioned an independent research agencyto survey manufacturing leaders in high-tech, aerospace and defense, and MedTech Executive Summary The global product development market continues to grow steadily, with a strong focus Marketplace Drivers: •Economic Headwinds:Inflation, interest rates, and risk of recession have ledto delayed product launches and market expansion for over half of surveyedorganizations. Companies are prioritizing flexible R&D and digital investment Supply Chain Resilience:Geopolitical conflicts and tariffs are accelerating on- •shoring and near-shoring strategies, with 88% of organizations shifting supply chainscloser to home. Inventory stockpiling, supplier diversification, and logistics route Respondents reportrelocating their supply •Regulatory Pressure:Compliance burdens are rising, especially in MedTech andaerospace and defense, where multi-standard requirements and environmental •Digital Transformation:Companies are doubling down on digital infrastructure, with70% planning increased technology investments in 2026. AI, machine learning, and Leaders say they planto increase technology Key Survey Insights Optimism Reigns in Manufacturing Nearly all manufacturing leaders anticipate revenue growth in 2026, with just 4% Takeaway: Industry confidence signals readiness for expansiondespite volatility—a positive indicator for suppliers Growth Over Everything Companies are shifting toward growth-focused product strategies rather than pure cost-cutting, with increasing revenue as a top priority for 42% of respondents over the next two Profitability Tops the Agenda Driving profitability stands out as a top business concern for 44% of organizations, with Customers Define NPDI Success Customer satisfaction is the primary metric for new product development and Takeaway: Embedding customer feedback loopsinto early design stages is critical for Collaboration, Compliance, and Talent Gaps Block Innovation Ineffective collaboration with supply chain partners (56%), keeping pace with regulations(53%), and lack of skilled workers (46%) are major barriers to innovation. Takeaway: Effective communication is as critical What do you consider the key barriers to new product development Ineffective collaboration with contract manufacturers, design partners, and suppliers Consolidation Spurs Vendor and Digital Reassessments Recent industry consolidations are influencing tech and partnership strategies withrespondents citing heightened vendor due diligence (49%), more scrutiny of product Takeaway: Organizations must reevaluate their vendor ecosystemsand digital strategy to strengthen flexibility and avoid Supply Chain Transformation •Supply Chains Come Home:On-shoring and near-shoring are accelerating, with over88% of organizations shifting supply chains closer to home to mitigate geopolitical Tariffs Reshape Supply Chain Playbooks:Respondents note inventory stockpiling •(48%), shift in sourcing locations (48%), increased production costs (47%), and contractrenegotiations (47%) as the main responses to tariffs. These tariff-driven adaptations •Communication Gaps Cost Efficiency:Poor communication across productteams and supply chain partners hinders supply chain management for 49% of •Digital Tools Dominate Supply Chain Operations:Quality management systems(QMS), supply chain management platforms, and sourcing/procurement tools Takeaway: Underutilization of PLM suggests missedopportunities for end-to-end visibility and “High-tech supply chain leaders who prioritizeformal collaboration using PLM are betterpositioned to address two challenges unique —Darren Henry, SVP General Operations, PTC Sustainability Becomes a Core Mandate •Sustainability is now integral to competitiveness, not just compliance, with 76% oforganizations ranking it as important or higher in product development. •Digital platforms for sustainability metrics (66%), formal ESG initiatives (58%), andcarbon footprint evaluations (35%) are gaining traction, but execution gaps remain Leveraging digital platforms like PLM and lifecycle assessment to gather sustainability metricsImplemented formal Environmental, Social, Governance initiativesAdded function/responsibility for sustainability (e.g., Chief Sustainability Officer) Looking Ahead: Close the execution gap by aligning sustainabilityinitiatives with measurable PLM-driven outcomes. Regulatory Compliance •Regulations Outpace Readiness:32% of organizations struggle to keep pace withevolving regulatory requirements, making compliance a strate