The European Union’s industrial strategy, framed around the principles of Single Market Resilience, Strategic Autonomy, and Competitive Sustainability, presents a paradoxical landscape that threatens to deepen the very crises it intends to solve. Recent insights from the Institute for Environmental Science and Technology at the Universitat Autònoma de Barcelona (ICTA-UAB) reveal that the current trajectory of EU industrial policy is insufficient and demands a fundamental reconfiguration. Without significant structural changes, the EU’s ambitions for a resilient, autonomous, and sustainable industrial base risk remaining unattainable.
Central to the concept of resilience is the fortification of foundational sectors that constitute the backbone of the European economy and society. Healthcare, affordable housing, social care, and public transportation combine to employ nearly 40% of the European workforce, underlying their critical importance. However, resilience in these domains cannot be strengthened without substantial public investment. This investment must be paired with the enhancement of working conditions and the development of vocational training programs aligned closely with societal needs. The study stresses that resilience absent these elements will remain a theoretical ideal rather than a practical reality.
The notion of strategic autonomy, a keystone of the EU industrial approach, is currently misunderstood in its implementation. True autonomy, as argued by the researchers, fundamentally necessitates a dramatic reduction in both material and energy consumption. Present policies, such as the recently legislated Critical Raw Materials Act, which encourages expanded resource extraction, may inadvertently exacerbate geopolitical tensions. Increased competition over raw materials within European borders could ignite fresh conflicts centered on extractive activities, thwarting the goal of self-sufficiency. In contrast, the researchers point to low-energy demand scenarios demonstrating the feasibility of halving Europe’s energy demand by 2050. Such reduction would enable a genuine pathway toward energy independence, significantly diminishing reliance on precarious import channels.
Current EU strategies for the green transition lean excessively on market-driven tools, including public subsidies, financial guarantees, and regulatory deregulation. While these mechanisms foster innovation—a critical factor—they fall short in enabling what scholars call "exnovation," the deliberate and managed phase-out of unsustainable technologies and infrastructures. This limitation, as Jason Hickel of ICTA-UAB emphasizes, perpetuates structural inertia within the industrial matrix, hindering transformative shifts necessary for decarbonization. The absence of robust instruments to deactivate high-carbon sectors, realign capital flows with public priorities, and steer production toward social well-being poses significant barriers to the green transition’s effectiveness.
The researchers underscore the insufficiency of relying solely on efficiency improvements within growth-oriented economic frameworks. Efficiency gains often succumb to the rebound effect, whereby improved technologies paradoxically lead to increased resource use through expanded production. Hickel articulates that for Europe to meet its decarbonization and strategic autonomy goals, a direct downscaling of non-essential, resource-intensive sectors is imperative. The current EU industrial policy framework neglects this critical dimension, rendering it ill-equipped to tackle the scale of transformation required.
This industrial policy disconnect is further exacerbated by a fragmented governance landscape that lacks coherent strategies for reinforcing essential public services. The overlapping crises of climate degradation, social inequality, energy insecurity, and geopolitical volatility necessitate an integrated and ambitious industrial vision, which, according to Richard Bärnthaler of the University of Leeds, is presently absent. Without such a vision, policies remain reactive and piecemeal, insufficient to surmount systemic challenges.
Integral to recalibrating the European industrial strategy is the elevation of public planning mechanisms, credit guidance, and expanded public ownership, particularly within the energy and financial sectors. These measures would reassert democratic control over resource allocation and investment flows, counteracting the dominant influence of profit-driven private capital that often subordinates long-term social and environmental goals. Sebastian Mang from the New Economics Foundation highlights that the EU’s reliance on private market mechanisms misses the opportunity to harness coordinated public action essential for resilience and sustainability.
A pivotal aspect of the proposed overhaul is the centralization of public investment in foundational sectors such as care infrastructure, public transportation networks, and affordable housing. These sectors not only provide the foundation of social well-being and employment but also represent critical arenas where industrial policy can intersect with social policy. Strengthening these sectors offers multiple co-benefits: reducing social vulnerabilities, creating stable jobs, and embedding sustainability within core economic activities.
Demand reduction emerges as a critical principle for achieving strategic autonomy and sustainability. Unlike traditional industrial approaches that prioritize growth and expanded consumption, the researchers advocate for a structural embedding of lower resource use. This paradigm shift involves redesigning production systems and consumption patterns to prioritize sufficiency over excess, enabling material and energy needs to decrease without compromising social well-being. It is a radical departure from existing policy frameworks, challenging the growth-centric orthodoxy that dominates contemporary economic thinking.
In advancing these ideas, the research proposes comprehensive coordination between monetary and fiscal authorities to enhance the fiscal capacity of public institutions. Through such coordination, public credit guidance could be deployed more effectively to finance structural transformations and green economic planning. Increased public ownership in sectors critical to decarbonization and strategic autonomy would ensure alignment of economic activity with democratic and ecological objectives, reducing vulnerability to market fluctuations and external shocks.
This reimagined industrial policy framework, focused on post-growth objectives, not only responds to European crises but sets a precedent for global industrial reform. It challenges the pervasive assumption that continuous economic expansion is compatible with environmental sustainability and social equity. Instead, it advocates for a deliberate realignment of industrial priorities that places care, climate, and equity at the strategic core.
The implications of this research are profound. If adopted, such a policy shift would transform the European industrial landscape, reinforcing its resilience, reducing its ecological footprint, and securing its autonomy in an increasingly volatile global context. However, realizing this vision demands political will and democratic engagement far beyond current commitments, signaling a crucial juncture for EU policymakers and society at large.
In sum, Europe stands at a crossroads where its industrial policy must evolve from contradictory and insufficient measures toward a coherent, radical, and socially grounded strategy. This strategy should embed foundational investment, deliberate demand reduction, and robust public economic management. Without this comprehensive approach, the EU risks perpetuating its crises rather than resolving them, undermining its long-term environmental, social, and geopolitical stability.
Article Title: Toward a post-growth industrial policy for Europe: navigating emerging tensions and long-term goals
News Publication Date: 13-May-2025
Web References:
10.1080/14747731.2025.2501821
Method of Research: Content analysis
Keywords: Economic growth, Economic development, Economics research, Environmental economics, Gross domestic product, Market economics, Socioeconomics, Economics
