Europe must revitalize economic growth to ensure the well-being of its citizens and maintain its role as a major global player. And this process will necessarily involve industry.
Indeed, the strategic importance of industry is far greater than suggested by its already significant share of GDP. Industrial strategy generates technologies that are then used by other sectors and are the main drivers of productivity and exports. Moreover, a dynamic industrial sector is a decisive factor in attracting investment, creating high-quality jobs, and building and maintaining the “social elevator,” all of which are pillars of welfare. Lastly, industry is strategic because it represents innovation and power, understood as the ability for each nation to influence their destiny through strategic and technological autonomy.
What is true for Europe is all the more so for Italy, which is a leader in European industry. The Made in Italy brand – in both traditional and more innovative sectors – is a heritage that must be protected, by employing to best effect the competitive capacity and innovation of which our companies are capable.
Maintaining a strong industrial sector and a sound future requires a strategy and a coherent framework of industrial policy measures that combine investment incentives with security, demographic, and training policies. All of these are necessary objectives that can act together to respond to global dynamics.
In this context, Europe must react to a trend in which its competitiveness is waning. The EU must view itself not as a market, but as a major industrial player with the capacity to strengthen investment and avoid being crushed by competition from, and the dynamism of, the United States and China and other emerging regions such as India, Singapore, Saudi Arabia, the Emirates, and the Far East.
Europe must therefore focus on certain particularly urgent measures, such as effectively assessing the impact of all regulatory provisions, which must not jeopardize competitiveness; providing strong safeguards for intellectual property, which is a necessary condition for innovation; and maintaining technological neutrality.
The intersection of research, technology, skills, and expertise is creating numerous pathways for extremely rapid innovation that Europe too needs to pursue from the outset. Innovation, technology, digitalization, and research (increasingly also in space) are making it possible to reinvent industry in a more rapid and adaptive way, within factories, in supply chain relationships, and in product and market diversification. All of which makes for a particularly interesting development pathway for the Italian and European industrial system.
At the same time, Europe needs a regulatory framework that enables the introduction of new technologies and artificial intelligence to factories, not only by facilitating their use, but also by fostering true technology champions. Champions with the ability to disseminate and adapt these applications in supply chains and ecosystems, which are a fundamental part of the production structure.
The resurgence of international conflicts has undermined the long-held belief that the economy and security are essentially separate domains. As a result, the world has moved rapidly from just-in-time models to a shortage economy. And it has become extremely vulnerable in terms of supply chains and goods transit routes. Today, the concept of security concerns not just defense, but many areas of daily life. It includes the ability to protect the economic structures of nations and to ensure continuity of supply and access to research and technology, and touches upon crucial issues such as artificial intelligence, cybersecurity, energy, and infrastructure.
Security is a major driver of innovation, which requires specific measures and conditions of certainty to develop supply chains and foster a collaborative approach to projects, including at the European level. However, there is also another link between security and innovation: research and production capacity ensures not just access to existing products, but also the development of new solutions. From this perspective, being competitive and attractive to investment becomes a strategic advantage for long-term security and autonomy.
This objective must also be pursued through economic governance, with possible recourse to common debt for projects of European interest and use of the margins provided by the new EU rules in the economic field to invest in strategic areas such as defense, health, infrastructure, and energy.
In a framework such as this, human capital is a factor as decisive as it is potentially scarce, given the ageing population. Together with demographic policies, training policies are a cornerstone of industrial policies. They must start in schools, continue through university, and extend to industrial ecosystems, drawing inspiration from significant example of best practices already present in Italy. The goal is to increase labor market participation, overcome the skills mismatch, and upskill and reskill workers who are already part of the active population.
Ultimately, in the face of systemic challenges a holistic approach to industrial policies is vital. It must involve all public actors in an ongoing dialogue with industry, academia, the scientific world, and intermediary bodies. A “whole-of-society” approach is needed, one that can coordinate, within a single strategy, the efforts and commitment of all stakeholders in the field to respond to the complex and rapid challenges posed by today’s geo-economic landscape.