The complexity of today’s business environment, especially the introduction of new technologies, means that companies can no longer rely on themselves to stay on the cutting edge. In order to manage the technological and geopolitical drivers of disruption, more manufacturers are forming valuable external partnerships and alliances. Increased interaction with third parties has emerged as not only a necessary feature but also a top growth strategy for this industry.
Forming partnerships with supply chain firms, startups, customers, and even competitors can give manufacturers an advantage, but this approach comes with an element of risk. For example, third parties may be exposed to labor issues in remote parts of the world, and safeguarding technology from an intellectual property perspective becomes increasingly vital. Data sharing concerns are difficult to manage within a single company, let alone with a number of partners.
Developing smart external partnerships can help companies in the manufacturing industry achieve a better understanding of compliance in international markets and avoid tax, trade, and political pitfalls. At the same time, general counsel must remain mindful of the myriad of risks associated with linking your company to an outside partner.