In an era marked by supply chain disruptions, geopolitical tensions, and rising costs in traditional manufacturing hubs, global businesses are rethinking the way they allocate production and investment. The Plus One strategy has emerged as a powerful tool in this transformation. At its core, the concept is simple. A company continues operations in a dominant location such as China, the United States, or Europe, but adds one more country to its network to reduce dependency, spread risk, and enhance resilience.

The most widely recognized form of this is the China Plus One strategy. For two decades, China has been the global workshop for everything from electronics to apparel. Its unmatched scale, infrastructure, and labor efficiency made it a magnet for foreign direct investment. But trade wars, COVID-era lockdowns, rising labor costs, and geopolitical uncertainty have shaken the confidence of multinational firms. The result has been a gradual shift. Companies are now exploring alternate destinations such as Vietnam, India, Indonesia, and Sri Lanka to diversify production while maintaining a footprint in China. This does not mean abandoning China. Instead, it reflects a desire to create parallel ecosystems in more agile, risk-insulated markets.

The same thinking applies to European and American companies through variations like Europe Plus One or US Plus One. For instance, as manufacturing becomes increasingly automated and value-driven, firms in Germany or France are looking to establish secondary hubs in regions like Eastern Europe, North Africa, or South Asia. These locations offer cost-effective labor, proximity to key markets, and growing digital infrastructure. The Plus One country becomes not just a backup location but an integrated part of a new global supply
web.

For emerging economies like Sri Lanka, the Plus One strategy presents both a challenge and an opportunity. It is a chance to insert themselves into global value chains by offering reliability, low risk, and investor confidence. But to succeed, these countries must go beyond cheap labor and tax incentives. They must prove their ability to meet international compliance standards, deliver uninterrupted logistics, and offer a transparent legal framework for investors. Companies choosing their Plus One destination are not simply looking for low
costs. They are seeking political stability, skilled workers, and the ability to scale operations with minimal regulatory friction.

Sri Lanka has the geographic advantage of sitting at the crossroads of major shipping lanes. It also has a young workforce, improving infrastructure, and recent momentum in legal and fiscal reform. But it must now act decisively to build the trust needed for companies to consider it a viable Plus One partner. This involves strengthening its special economic zones, streamlining customs procedures, and improving the independence of investment-related regulatory bodies. Equally important is the need to align education and training with the
requirements of global firms in areas like advanced manufacturing, logistics, IT services, and compliance.

It is worth noting that many of the countries already benefitting from the Plus One strategy have moved quickly. Vietnam negotiated dozens of free trade agreements and became a preferred partner for electronics and textiles. Morocco has become a key manufacturing base for European automotive firms. Bangladesh scaled its apparel sector through predictable export policies. The lesson is clear. Timing, policy consistency, and reliability matter more than ever.

The Plus One model is not just about shifting factories. It is about building long-term relationships between global brands and local ecosystems. Countries that can deliver both economic value and regulatory trust will be the real winners. For Sri Lanka, this is a strategic moment. By positioning itself not just as a low-cost alternative but as a smart, stable, and scalable partner, it can rewrite its role in the global economic order.

In a world where resilience is as important as efficiency, being the Plus One is no longer about being second. It is about being indispensable.