EU industrial policy in the evolving geo-political and geo-economic environment

Michael Landesmann

No 96, wiiw Policy Notes from The Vienna Institute for International Economic Studies, wiiw

Abstract: Industrial policy has become a core item in the policy agenda of many governments as well as of the EU which has come up with many policy initiatives over the past two decades. This paper emphasises the important shifts taking place in the global economy with the rise of China but also of other emerging/ed economies that affect the competitiveness of the European economy and challenges its traditional comparative advantages. The challenge to the European economy is compounded by having been left behind in some of the most innovative areas and branches of economic activity (IT, most recently AI, quantum and cloud computing) and also lagging behind in important technological shifts in more traditional industries (such as EVs in the transport equipment industry). On top of this – but also linked to global economic developments – have come rather big ruptures in geo-political relationships such as the decline of multilateral institutions and increasing conflictual relationships amongst the major acting powers on the global political stage. We discuss in this paper the challenges that EU industrial policy has to meet given the trends in geo-politics and geo-economics.

Keywords: EU; industrial policy; geo-economics; geo-politics; industrial restructuring (search for similar items in EconPapers)
JEL-codes: F02 F42 F51 F6 L16 L5 L52 O25 O31 O33 (search for similar items in EconPapers)
Pages: 42 pages including 2 Tables and 4 Figures
Date: 2025-06
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