Rethinking Industrial Transformation: Enablers for Systemic Change

Industrial policy is central to advancing the European Union’s long-term priorities and goals. In recent years, the EU has faced multiple shocks that affected European people, economy, environment and security. Ensuring that EU industrial policy remains agile and responsive to evolving challenges requires exploration of diverse enablers for industrial transformation. This report recognises transformative change as a complex process that demands fundamental shifts across many dimensions, including not just economy and technology, but also societal, ecological, political and cultural aspects. It applies a six-lens analytical framework on transformative change to identify cross-cutting enablers for industrial transformation, building on a synthesis of literature, expert inputs and fifteen case studies. The three enablers for industrial transformation presented in the report are outlined below. Culture, people, and places. Industrial transformation unfolds within broader processes of social and cultural change, where actors have diverse visions, needs and perspectives. The chapter shows how empowered social partners can catalyse change and how narratives, symbols, and emotions shape transformations. Addressing Europe’s geographic and cultural diversity, and attention to the social contract, are explored as essential building blocks for credibility and legitimacy of transformations. Destabilisation and phase-out. The chapter emphasises phase-out as an integral component of industrial renewal, drawing on successful cases and warning of the risks of neglecting deliberate discontinuation, such as structural lock-ins that impede necessary change. It also highlights how low-hanging fruits can be harnessed to foster systemic change, and the role of social and labour dimensions in ensuring the long-term viability of policy mixes. Broadening the view on resilience. The chapter deepens current understandings of industrial resilience, underscoring its interconnected, dynamic and multi-dimensional nature. It illustrates how distributed systems enable systemic and coordinated action, how industrial restructuring can enhance adaptability to shocks and how crises can be harnessed through deliberate transformation. Together, these enablers address issues of high relevance for the EU and provide significant leverage for fostering a fair, resilient, and regenerative industrial future for Europe.