European ambition, regional specialisation: Europe's industrial future will be shaped locally

Europe is talking about industry again. After years in which much of the economic debate centred on the green transition, digitalisation and market regulation, intensifying international competition has brought productive capacity back to the heart of Europe's strategy. Recent reports have highlighted the continent's relative loss of competitiveness and the need to revive investment, productivity and strategic autonomy. As Miquel Sàmper, minister for Business and Labour in the Government of Catalonia, pointed out, the next step is to move beyond diagnosis and start acting: translating this renewed industrial ambition into concrete decisions and investment at the pace demanded by competition with the United States and China.

The Microspace event Industrial Accelerator Act: the regions in the European Union, organised in Brussels by Agenda Pública with the support of the Government of Catalonia, examined the role of regions in Europe's renewed industrial drive. Public officials, regional representatives, businesses, experts and civil society discussed how to make European reindustrialisation a reality and, in particular, the role regions should play both in shaping legislation and in implementing it on the ground. Beyond the Industrial Accelerator Act itself, the discussion raised a broader question: how to draw on regional knowledge, industrial specialisms and the ability to put policy into practice when designing European industrial policy.

From diagnosing Europe's competitiveness problem to taking action

Europe appears to have recognised that industrial policy can no longer be confined to setting long-term goals. Comparisons with the United States and China bring an increasingly decisive factor into play: speed.

Regulation remains one of the European Union's main policy tools. But when industrial policy is hampered by lengthy procedures, administrative fragmentation or regulatory uncertainty, Europe risks losing investment before its incentives can even take effect. That is why much of the debate surrounding the Industrial Accelerator Act (IAA) concerns not just what needs to be done, but how to do it faster.

"Public officials, regional representatives, businesses, experts and civil society discussed how to make European reindustrialisation a reality"

Sàmper placed this need for action in the context established by the Letta and Draghi reports: Europe has become more aware of its industrial position, but must turn that awareness into decisions that can keep pace with competing economies.

Moving faster does not necessarily mean less regulation. The challenge is to find ways to preserve European safeguards without allowing them to become barriers to investment. One possibility discussed at the event was introducing mechanisms such as deemed approval when authorities fail to respond or adopting faster procedures for strategic industrial projects.

This underlying issue is particularly important for regional and local authorities. They are often responsible for turning major European decisions into practical approvals, industrial sites, infrastructure, permits, training and support for businesses. Ambitious legislation can lose much of its effectiveness if the administrative capacity to implement it is lacking in the places where factories are eventually built or new industrial ecosystems take shape.
 

Industrial policy as a tool for regional development

Reviving industry is not just a matter of international competitiveness; it also raises questions about how growth is shared within countries. A central theme of the discussion was the role industry can play in strengthening territorial cohesion. Unlike economic activities that tend to cluster in major metropolitan areas, industrial projects can bring investment, jobs, infrastructure and expertise to places far from the main urban centres.

"A central theme of the discussion was the role industry can play in strengthening territorial cohesion"

Jaume Baró, secretary for Business and Competitiveness in the Government of Catalonia, linked this approach to Catalonia's aim of increasing industry's share of GDP to 20% and the implementation of its National Pact for Industry. Combining cross-cutting initiatives with measures targeting specific sectors such as semiconductors, the programme also illustrates how a regional administration can turn an industrial strategy into practical action.

Its importance goes beyond economic growth. Industrial policy can help reduce territorial imbalances within a country: creating opportunities outside major cities, strengthening medium-sized towns and cities, improving employment prospects in particular areas and easing some of the pressures created by the concentration of economic activity and population.

In this sense, reindustrialisation is about more than supporting businesses. It has implications for employment, housing, infrastructure, training, innovation and territorial cohesion. It could therefore become one of the most effective ways of spreading growth across different parts of Spain.

This approach connects with a wider debate that Agenda Pública has previously explored in its analysis of Spain's different economic hubs: future competitiveness depends less and less on every region following the same model, and increasingly on building on their different industrial strengths and connecting them with one another.
 

European ambition, regional specialisation

Perhaps the phrase that best captures the discussion is "European ambition, regional specialisation". Europe can set strategic priorities, define overarching industrial goals and mobilise regulatory and financial instruments. Regions, however, have a much more detailed understanding of their own value chains, businesses, technological capabilities, infrastructure and weaknesses. Asturias faces different starting conditions for industrial development from those in Catalunya, Andalusia, Castilla-La Mancha or the Basque Country, and it would make little sense to expect every region to compete in exactly the same sectors.

"Regions have a much more detailed understanding of their own value chains, businesses, technological capabilities, infrastructure and weaknesses"

Specialisation also makes it possible to identify more tangible opportunities at a time when Europe is unlikely to regain leadership across every technology. The ground lost to China and the United States in certain fields makes prioritisation essential. In technological races where a competitive advantage may already be difficult to recover, there are still niches —as the discussion of photonic chips at the event illustrated— in which specific strengths in research, business and manufacturing can create high-value opportunities. Bringing a regional perspective into European policymaking therefore need not fragment industrial policy; it can make it more targeted.

The same issue arose in discussions about future industrial acceleration zones. Speaking from the perspective of a region with a long industrial history, Paz Palacio, Asturias' representative in Brussels, noted that their design offers an opportunity to reconsider the relationship between industry and regional development: which ecosystems should be strengthened, which infrastructure could be shared, how far existing industrial clusters should be favoured over the emergence of new hubs, and which criteria should determine whether a zone is considered strategic.

There is no one-size-fits-all answer. An established industrial region may need to modernise and decarbonise its existing industrial capacity, while another may need to build new infrastructure, attract supply-chain investment or develop emerging sectors. One-size-fits-all industrial policy has its limits when regional needs differ so profoundly.
 

Regions must also have a say in European policymaking

The debate over the IAA also raises a broader institutional question. Regions clearly have a role in implementing European policies, but they are also calling for a greater say in shaping them.

"Regions clearly have a role in implementing European policies, but they are also calling for a greater say in shaping them"

Concern is growing over funding models based primarily on national funding envelopes, under which European resources are channelled through member states before reaching individual regions. From a regional perspective, this shift could weaken Brussels' ability to identify existing industrial specialisms and the specific opportunities available in each territory.

A comprehensive map of industrial capabilities across Europe's regions would reveal where particular expertise, suppliers, infrastructure, energy resources and technological capabilities are concentrated, helping to direct investment more effectively. The aim would not be to pit national governments against regions; it would be to identify the right level of government for each decision. Europe can define common priorities; member states can ensure national coherence; and regions bring local insight and practical knowledge of the territory.

Such multilevel governance is particularly important in Spain, where many of the powers that shape industrial investment lie with the autonomous communities and local authorities.
 

Green industry must still be industry

Europe's new industrial policy cannot be separated from the climate transition either. Yet the relationship between these two agendas is beginning to be framed differently. It is now difficult to imagine a future for European industry without decarbonisation. As one participant put it, "industry can no longer afford not to be green". But the other half of the equation matters just as much: industry must remain viable.

The promise of competitive green industry rings hollow if the costs or procedures associated with the transition ultimately push production towards countries with less stringent standards. The challenge is to use clean energy, innovation and decarbonisation to attract industrial activity rather than inadvertently encouraging businesses to relocate elsewhere.

"The challenge is to use clean energy, innovation and decarbonisation to attract industrial activity"

Spain has significant advantages here. Its access to renewable energy could help attract certain energy-intensive projects, provided it is backed by electricity grids, infrastructure, land, skilled workers and administrative arrangements capable of turning that resource into productive investment.

At the same time, European strategic autonomy cannot be measured solely in terms of factories and supply chains. Its legitimacy will depend on whether it delivers greater wellbeing, secure employment and good-quality jobs.
 

Foreign investment, but with a strategy

The pursuit of autonomy does not mean closing Europe off from the rest of the world. The debate over relations with China illustrates this tension. An open economy such as Europe's can hardly embrace isolation or turn its back on foreign investment and international trade. The question is how to ensure that foreign investment strengthens Europe's industrial base.

The idea of "protected investment" captures that balance: attracting international capital while safeguarding manufacturing capacity, jobs, competition rules and European standards.

Europe also retains qualities that are difficult to replicate —strong institutions, rights, stability, quality of life and access to a vast market— which continue to make it attractive compared with other parts of the world. Spain's economic and cultural position also gives it a distinctive role as a bridge between Europe and Latin America. Trade openness can therefore coexist with a European industrial policy, provided openness does not become dependence.
 

From legislation to the factory floor

The Industrial Accelerator Act could become an important part of Europe's new industrial policy framework, but its success will not be measured by the ambition of the legislation alone. It will also depend on its scope —whether it covers entire value chains or only selected stages of production—, on clear criteria for identifying strategic sectors and regions, and above all on whether its measures can be put into practice.

Regions are central to this effort. As Marc López Plana, director of Agenda Pública, noted, they are testing grounds for industrial policies, authorities capable of identifying regional strengths and the level of government at which many investments are turned from plans on paper into real economic activity.

Europe needs an industrial policy broad enough to meet the scale of global competition, yet sufficiently targeted to recognise that industry will not be built in the abstract. It will take shape in specific places, drawing on local strengths and tackling practical obstacles. Ambition must be European. Specialisation —and much of the implementation— will necessarily be regional.