Reinvesting Manufacturing in Europe: Strategies to Enhance Competitiveness via Decentralized Production
Europe is witnessing a significant shift in manufacturing as companies re-evaluate their production strategies in light of global supply chain disruptions and geopolitical tensions. This trend, known as reshoring, is being driven by policy incentives, supply chain risk mitigation, tariff realities, and enabling technologies like additive manufacturing (AM).
Policy-driven, coordinated reshoring
European reshoring efforts are deliberate and policy-led, contrasting with the more fragmented and politically driven reshoring in the U.S. Governments across the UK, Italy, and the EU are offering targeted incentives—such as decade-long tax breaks in Italy and sector-specific initiatives like the European Chips Act—to encourage companies to bring manufacturing back home. These incentives focus on critical sectors including semiconductors, green technology, and automation, which incorporate additive manufacturing technologies for agile, flexible production.
Supply chain resilience and risk mitigation
The growing complexity and disruptions in global supply chains have made companies prioritize supply chain visibility, shorter lead times, and diversified supplier bases. Reshoring and nearshoring reduce logistics complexity, transit times, and exposure to risky trade routes or customs bottlenecks. This trend is notably strong, with 73% of European companies in 2025 investing in nearshoring or reshoring strategies—up sharply from 42% the previous year. Additive manufacturing supports this by enabling more localized, on-demand production, reducing dependency on distant suppliers.
Trade and tariff influences
The 2025 U.S.-EU Trade Pact introduces 15% tariffs and sectoral rebalancing, incentivizing industrial localization and reshoring within Europe to avoid tariff impacts and regulatory hurdles, particularly in sensitive sectors like semiconductors and pharmaceuticals. This creates further impetus for European companies to invest in domestic or regional manufacturing capabilities, including advanced manufacturing technologies.
Strategic investment and M&A activities
Manufacturing and engineering sectors have seen M&A trends aligned with reshoring strategies, reflecting heightened focus on supply chain security. Additive manufacturing is a critical enabler here due to its capability for flexible, smaller-batch production, which fits the reshoring goal of responsive and resilient manufacturing ecosystems.
Relation to additive manufacturing specifically
Additive manufacturing (3D printing) supports reshoring by allowing companies to produce complex parts locally with shorter lead times and less inventory, enhancing supply chain resilience. It complements policy goals of technological sovereignty and reduces reliance on global suppliers subject to disruption. This technology is particularly relevant in sectors promoted by the EU’s industrial policies, such as green tech and semiconductors, where precision and customization are critical.
In summary, Europe's reshoring is driven by policy incentives, risk-aware supply chain restructuring, tariff realities, and enabling technologies like additive manufacturing, all aimed at building long-term industrial resilience and reducing external dependencies. This shift towards reshoring and additive manufacturing is not only a response to recent global events but also a strategic move towards a smarter, faster, and more resilient future for European industries.
[1] European Commission. (2021). European Industrial Strategy. Retrieved from https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-single-market/european-industrial-strategy_en
[2] McKinsey & Company. (2021). Reshoring and nearshoring: A new era for global manufacturing? Retrieved from https://www.mckinsey.com/business-functions/operations/our-insights/reshoring-and-nearshoring-a-new-era-for-global-manufacturing
[3] European Commission. (2022). European Chips Act. Retrieved from https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-single-market/european-chips-act_en
[4] Mergermarket. (2021). M&A activity in the manufacturing sector reflects reshoring strategies. Retrieved from https://www.mergermarket.com/articles/deals/ma-activity-in-the-manufacturing-sector-reflects-reshoring-strategies-406295
[5] European Commission. (2021). EU-US Trade and Technology Council. Retrieved from https://ec.europa.eu/info/business-economy-euro/single-market-europe/trade/trade-relations/countries-territories/united-states-us/eu-us-trade-and-technology-council_en
