During the COVID-19 medical crisis, dependency on imports compounded supply shortages of essential goods like medical equipment, masks, and pharmaceuticals which threatened lives. The web of extended supply chains built up through offshoring and globalization in recent decades proved brittle in the face of a shock.
To reduce this vulnerability, key industries could be deliberately onshored after Corona. This could create a win-win-win scenario: increasing European economic convergence, increasing the resilience of the European economy, and decreasing carbon emissions.
The first step would be for the European Union to establish a taxonomy of key industries, as well as lists of essential medical supplies and equipment for care, education, catastrophe relief, and infrastructure repair and maintenance. Second, EU cohesion funds could be redeployed or expanded to fill any existing gaps that emerge from screening current capacities and stockpiles against the taxonomy of essential goods and industries. High-value-add parts of newly onshored value chains could deliberately be placed in poorer regions, reinforcing economic convergence. Finally, the relocalization of the production of essential goods may boost sustainability by saving on transport emissions.
Tentative estimates by the European Commission (p. 15) put the cost of onshoring five strategic industries at 20bn Euro per year over the short term, indicating that they are not prohibitive.
This proposal links closely to the European Investment Agency, which would contribute to building the state capacity required to implement this. Further, since a reconfiguration of the European industrial landscape of this order would be an inherently political project, it would have to be combined with, and overseen by, appropriate structures of democratic decisions-making, such as a reinforced and reinvented European Parliament.