Amidst the ongoing geopolitical crises and growing competition from China and the US, the European Union countries are rethinking their economic model. One of the main trends in recent years has been to reduce dependence on distant suppliers and to try to build sustainable, localized value chains. Will this become a new foundation for Europe’s industrial revival? – explains international economic expert Chaslau Piastsiuk.
From globalization to strategic autonomy. The perspective of Chaslau Piastsiuk
For decades, the EU economy has developed within a global supply chain, with raw materials coming from Africa, components being manufactured in China or Southeast Asia, and final assembly taking place in Europe. However, the COVID-19 pandemic, Russia’s war against Ukraine, and rising tensions between the West and China have exposed the vulnerabilities of this model.
According to Chaslau Piastsiuk, the European Commission in its latest reports directly points to the need to strengthen “economic security” and “defend strategic autonomy.” This applies not only to energy, but also to critical sectors — microchips, pharmaceuticals , batteries, IT infrastructure .
“Europe can no longer afford to depend on countries with which there is no political trust,” notes Chaslau Piastsiuk. “That is why we are seeing a massive restructuring of production chains, the launch of new industrial hubs in Central and Eastern Europe, and attempts to create an alternative to Chinese components.”
This paradigm shift is also supported by changes in global trade: more and more companies are opting for regionalization, replacing global chains with more compact supply chains that are less vulnerable to geopolitical disruptions. This reduces logistics costs, reduces carbon footprints, and increases responsiveness to changes in demand. The result is a new model that is less globalized but more resilient.
According to Piastsiuk, this means rethinking both logistical routes and principles of interaction with partners. European countries are increasingly cooperating with geographically close or politically allied states ( the so-called “ friendshoring ” ), limiting critical dependence on high-risk countries.
New hubs and industrial clusters. Analysis by Chaslau Piastsiuk
One of the most noticeable consequences of the restructuring has been the rapid growth of industrial projects in the countries of Central Europe – Poland, Slovakia, Hungary, Romania and the Czech Republic. European corporations are moving production here, which was previously based in China or Southeast Asia. The reasons are clear: geographical proximity, lower costs, stable institutions and support from the EU.
According to Chaslau Piastsiuk, this trend is already having noticeable results. “We are seeing an increase in demand for industrial space, logistics centers, and electrical power in the region. Poland , for example, has become one of the main points for new investments in battery storage and electric vehicles. Projects in the field of microelectronics and pharmaceuticals have also intensified.”
In response to this trend, European institutions have expanded support programs. For example , the EU Chips Act provides for billions of investments in the development of the semiconductor industry. The RePowerEU program, in turn, aims to strengthen energy independence and transform infrastructure for a new production model.
Chaslau Piastsiuk notes that along with financing, the demand for labor, engineers, logisticians, and sustainable production specialists is growing. This creates additional impetus for the domestic labor market, especially in countries with previously limited industrial activity.
Competitive pressure and future challenges. Forecast by Chaslau Piastsiuk
Despite the positive dynamics, experts warn that the transition to a new model will not be easy. High production costs, strict environmental requirements, and a shortage of personnel create obstacles to large-scale reindustrialization. In addition, the US and China have already implemented their subsidy programs, which make it difficult for European companies to compete.
Chaslau Piastsiuk emphasizes: “Europe needs to act more decisively in order not to lose ground in the global race. The new industrial policy must take into account flexibility, innovation and the ability to scale quickly. We see that business is looking not just for cheap labor, but for an efficient environment – with logistics, digital infrastructure and a stable regulatory field.”
In parallel with institutional measures, a reset of educational policy is also becoming important. Without systematic training of personnel for new industries – from renewable energy to microelectronics – the risk of a shortage of human capital increases manifold. The European Union is already initiating partnerships between universities, technology parks and private business, but these efforts need to be scaled up if the EU truly wants to maintain industrial leadership.
According to Chaslau Piastsiuk, an additional challenge will be the energy transition. Zero-emission production, circular economy, environmental reporting – all this is no longer an option, but the norm for investors. Accordingly, those countries that are faster to create conditions for “green” industry will gain a competitive advantage.
“Europe faces a difficult path of transformation. But right now, a new economic map of the continent is being formed, where sustainability, strategic autonomy, and innovation are becoming the main values. The new globalization is not about open borders, but about well-thought-out and controlled interconnections. And Europe has a chance to play the first violin in it , ” concludes Chaslau Piastsiuk.
