Why it matters: Europe’s economic competitiveness increasingly depends on secure access to critical raw materials. New research from Italy’s main industrial association warns that concentrated supply chains — many linked to China — are becoming a structural strategic risk.
The report: A study presented in Rome by the research centre of Confindustria highlights how critical dependencies have moved beyond a trade issue and now sit at the centre of industrial strategy and geopolitical competition.
The key point: According to economist Cristina Pensa, globalisation is not collapsing — it is fragmenting.
- “Critical dependencies are not a temporary phenomenon,” Pensa writes in the report’s conclusions. “They represent a structural dimension of the current phase of the global economy.”
The big picture: Globalisation is not disappearing. Instead, it is being reshaped.
- Trade flows remain intense, but uncertainty is rising. Protectionist measures are increasing and geopolitical tensions are reshaping global value chains.
- The result is a more fragmented global system in which economic interdependence can become a tool of strategic leverage.
- For decades, interconnected supply chains were seen primarily as stabilising forces. Today they are also potential vulnerabilities.
- Highly concentrated production — particularly in sectors linked to advanced technologies — amplifies systemic risk and exposes advanced economies to external shocks.
- In practice, countries that control key resources increasingly hold strategic leverage over those that depend on them.
Italy’s exposure. The report’s analysis of Italy’s industrial structure highlights significant vulnerabilities across several sectors.
- The most sensitive areas include:
- Energy products
- Metallurgical semi-finished goods
- High-technology industries, particularly electronics and pharmaceuticals
- The level of risk varies depending on several factors, including the structure of global supply, the geopolitical distance of suppliers, and the strategic importance of downstream applications.
- Some supply chains show particularly high structural vulnerability. These include industries connected to:
- electronics
- permanent magnets
- aerospace
- defence
- In these sectors, dependency risks go beyond economics and acquire clear strategic implications.
What Europe should do. The study argues that addressing critical dependencies requires action both at the European and national levels.
- At the European level, stronger coordination is essential. Key priorities include:
- deeper integration of industrial and trade policy
- common instruments for procurement
- coordinated investment strategies
- shared mechanisms for managing strategic risks in supply chains
- At the national level, governments should adopt a full value-chain perspective. This means:
- strengthening vertical integration
- supporting larger and more resilient industrial actors
- expanding advanced risk-management tools
- The objective is not to dismantle global supply chains, but to diversify and strengthen them.
The sustainability challenge. Another issue highlighted in the report concerns the relationship between sustainability objectives and supply security. The two are not automatically aligned.
- In some cases, environmental policies may increase supply vulnerabilities in the short term, even if they generate benefits over the longer term.
- The challenge for policymakers is therefore to turn sustainability into a lever for resilience rather than a constraint.
- Possible path include:
- expanding circular economy models
- developing domestic refining capacity
- investing in technological innovation
- Such measures could strengthen Europe’s control over strategic industrial nodes while avoiding distortions that might weaken competitiveness.
The bottom line: The report delivers a clear message: managing critical dependencies cannot be treated as a sectoral issue.
- It must sit at the heart of a new European development strategy.
- In an era marked by multiple crises and intensifying geopolitical competition, strategic autonomy does not mean autarky.
- It means the ability to diversify suppliers, manage risks and retain control over the key nodes of strategic supply chains.
- Without a coordinated strengthening of productive, technological and institutional capacities, Europe will struggle to reduce its structural vulnerabilities — and to sustain the green and digital transitions on which its economic future depends.
