Europe’s policymakers are speaking more openly about industrial strategy than they did a decade ago, but the continent still struggles to turn that language into execution. The EU understands that the next era of power will be shaped by technology, supply chains, and critical infrastructure, yet it continues to govern those priorities through a patchwork of national interests.
This matters because industrial policy is becoming the new language of sovereignty. Europe wants to secure semiconductor capacity, reduce dependence on external suppliers, expand green manufacturing, and protect strategic sectors from geopolitical shocks. Those goals are coherent in theory and difficult in practice, especially when member states compete to attract investment rather than coordinate it.
The single market remains Europe’s greatest strength, but it is not automatically enough in an age of subsidies, export controls, and state-backed champions. The United States and China are prepared to move capital and policy together; Europe often still debates the rulebook while others build the factory.
That slow motion has consequences beyond competitiveness. If Europe cannot produce at scale in strategic sectors, it will keep importing vulnerabilities along with goods. Dependence on external technology, energy, and logistics becomes more dangerous when the world order is defined by pressure, not predictability.
The question, then, is whether Europe can learn to act collectively without abandoning its liberal economic DNA. A smarter industrial policy would not mean copying state capitalism. It would mean using Europe’s institutions to create scale, align investment, and stop treating fragmentation as an acceptable substitute for strategy.
