European industry is losing its competitive edge not because it lacks technology, but because of a productivity gap, slow scaling, and the rising cost of decision-making. The solutions that could give it a new future have been known for years: less regulation and more economic logic, flexibility instead of rigid plans, and finally cooperation with the defence sector, which can and should draw on the experience of the automotive industry. These are the key conclusions of the report "Adaptation, Automation, Autonomy – The Operating Model of Industry 2030", prepared as a summary of last year's InnoTech Day 2025 conference.
Credit: Nextomation
There is no doubt that Europe is losing the race for competitiveness before our eyes, while the measures taken so far, based on regulation and market protection, have proved insufficient.
This does not mean, however, that the automotive industry has no further room for growth.
Experts from the automotive and defence sectors who took part in the InnoTech Day 2025 conference agreed that, in order to survive, the automotive industry needs a radical shift in its management paradigm.
"Passively observing global change risks marginalising European industry. We cannot simply react. The question is not WHETHER to invest, but HOW to invest and who to partner with to do it wisely," emphasises Bartłomiej Gruszczyński, COO at Nextomation.
Despite the gradual decline in its share of global vehicle production – from 31% at the beginning of the 21st century to around 15% today – Europe's automotive industry remains one of the key sectors of the EU economy. The automotive industry directly and indirectly generates approximately 7% of the European Union's total GDP, while its importance within manufacturing is even greater, accounting for around 8% of the value added generated by EU manufacturing.
The scale is impressive
Automotive companies invest more than EUR 85 billion annually in R&D, accounting for nearly 30% of all EU spending on innovation. According to data from the European Automobile Manufacturers' Association (ACEA), the entire automotive ecosystem – manufacturing, sales, services, transport and logistics – provides stable livelihoods for millions of Europeans. The sector employs nearly 14 million people, representing between 6.1% and 6.9% of total employment in the EU. Conference participants stressed that neither the EU as a whole nor any individual Member State can afford to lose these jobs, skills and tax revenues. And, as it turns out, they do not have to. According to the European Policy Centre (EPC), an independent think tank, the automotive sector – currently facing excess production capacity, layoffs and technological transformation – could support the development of Europe's defence capabilities by providing manufacturing capacity, skilled workers and dual-use innovation.
An analysis of the panel discussions and conversations with technology leaders held during InnoTech Day 2025 points to three key vectors of change recommended through 2030. First, the era of regulation needs to give way to a return to economic fundamentals. Second, time is becoming a new currency: in the face of geopolitical threats, the defence industry is redefining the meaning of efficiency.
According to Michał Paradowski and General Mieczysław Bieniek, in conditions of uncertainty, the winner is not the one with the lowest production cost, but the one that can deliver the solution fastest. The main challenge is the industrialisation of defence: moving from workshop-style production to large-scale, repeatable manufacturing – including ammunition and drones – while making effective and rational use of experience and standards developed in other industries such as automotive and electronics.
Finally, flexibility and agility must replace rigid planning. Whether we are talking about production lines across different industries or solutions for the defence sector, one of the most practical operating models is adaptation – understood as using existing knowledge, experience and, in some cases, elements of existing infrastructure to meet new needs, particularly where the rapid build-up of defence manufacturing capacity is critical.
We invite you to read the report "Adaptation, Automation, Autonomy – The Operating Model of Industry 2030", which reflects not only the conclusions of the conference, but also Nextomation's 20 years of experience in delivering complex manufacturing projects. The full report is available for download at: https://nextomation.com/report/
Credit: Nextomation
We believe that Europe should treat dual-use synergy – the use of the same solutions in both civilian and defence production – not as a slogan, but as an operating practice. Automotive can learn from the defence sector, particularly its determination in achieving objectives and its resilience to supply-chain disruption.
Defence manufacturing, in turn, can benefit from adapting the scale of civilian production and from the automotive industry's approach to process optimisation and production organisation. Both sectors stand to gain from this cooperation.