Frankfurt, 11 November 2026 – Mechanical and plant engineering, with its technologies, plays a central role when it comes to translating innovation into competitive production. Europe is technologically strong in this area, but too rarely manages to translate this strength into competitive production, industrial learning curves, and value creation. This is precisely where one of the greatest threats to Europe’s industrial competitiveness lies. This is the conclusion reached by the new joint study “From Dependency to Sovereignty” by VDMA and Porsche Consulting.
Innovation must be industrialized
The study identifies an implementation gap as Europe’s primary challenge. While China benefits from industrial scale, integrated supply chains, and government-supported scaling, and the U.S. leverages strong capital markets and demand advantages, Europe possesses a capable but fragmented research and engineering base. High costs, comparatively slow implementation, fragmented capital markets, and a lack of industrial scale make it difficult to translate European strengths into global competitiveness.
The key message, therefore, is this: Europe must not only promote innovation, but also industrialize it. After all, competitiveness isn’t determined in the laboratory. It is only on the production floor that process knowledge, competitive yields, track records, and industrial learning curves are developed. Mechanical and plant engineering plays a key role in this process: it translates new technologies into stable processes, automated production systems, and scalable factories.
Four Key Technologies, Different Priorities
The study examines four strategically important technology sectors: battery production, semiconductors, humanoid robotics, and photovoltaics. For each technology sector, specific strategic directions are outlined: Europe should once again place greater priority on the industrialization of battery production, expand its leadership in semiconductor equipment, actively help shape the emerging ecosystem of humanoid robotics, and make a targeted effort to regain production capabilities in photovoltaics.
The study highlights the urgent need for action by citing the EU’s trade deficit with China, which stands at 360 billion euros. According to the study, imports are nearly three times as high as exports. At the same time, the study points to economic potential: In the most favorable scenario, investments in battery production facilities in Europe could rise to 3.6 billion euros by 2035. For semiconductor machinery and equipment, the value added generated by EU-controlled companies could rise by approximately 43 billion euros to 72.5 billion euros in the best-case scenario. These scenarios describe potential outcomes, not certain developments.
Strategic clusters must deliver results
Based on this analysis, the study identifies six categories of levers for policymakers and industry: shaping and protecting markets; building capabilities and ecosystems; securing strategic control points; enabling investment; industrializing and scaling; and monetizing the installed base. These include fair and reciprocal market conditions, more consistent market oversight, faster transfer from the lab to the factory, better financing options for industrial scaling, and the development of integrated production solutions. Strategic industrial partnerships and clusters are intended to bring together companies, machinery manufacturers, research institutions, investors, and public sector actors through concrete projects, shared infrastructure, and technological roadmaps.
This is explicitly not about isolationism or an attempt to relocate entire value chains to Europe. The study advocates for open markets and diversified international partnerships. At the same time, Europe should maintain and expand its own capabilities in critical industrial areas where expertise is difficult to replace.
From Funding to Economic Success
This presents political leaders with a clear mandate: funding programs and regulations must be more closely aligned with whether they enable industrial investment, flagship projects, and scaling up in Europe. Among other things, the study recommends faster approval and funding procedures, the expansion of pilot and testing infrastructure, the mobilization of private capital, and a level playing field and reciprocity in market access. For companies, the challenge lies in looking beyond the individual machine. Integrated production solutions, automation, software, process expertise, and service and lifecycle offerings can help firmly anchor European suppliers in strategic value chains over the long term.
Global Partnerships Instead of Isolationism
At the same time, the study emphasizes the importance of international cooperation: Global partnerships are intended to expand market access and strengthen resilience. Critical intellectual property, production architectures, process data, and industrial know-how should be retained within European ecosystems.
