There is a growing fear in Europe that industrial decline is inevitable. Concerns about competitiveness, investment, energy costs, and the resilience of supply chains have moved from the margins of policy debate to the center and analysts have warned that Europe has structurally lost ground to Asia in manufacturing, technology, and scale. I do not accept that conclusion.
While the pressure is real and increasingly visible, the outcome is not inevitable. Recent manufacturing indicators show there is still momentum to build on. S&P Global’s Eurozone manufacturing Purchasing Managers’ Index rose to 52.7 in August, its strongest reading since May 2022, with factory output growth at a four-and-a-half-year high. Europe now needs to put investment behind its industrial ambitions at a pace and scale that matches the challenge.
Across global manufacturing, competition depends less on isolated advantages and more on how effectively entire systems operate in harmony. Asian manufacturers have built highly integrated industrial ecosystems that combine supply chains, component production, software capabilities, and consumer platforms. They operate with structural cost advantages—cheaper energy, lower raw material costs, and sometimes significant state support—that European manufacturers simply do not have access to. This allows them to enter the European market with products priced far below what European production can match.
