In the age of Trump it is time for companies to grow

Ever since Trump returned to the White House, a new film has begun, where everyone is looking for a role. From Russia to China to Ukraine, via South America and the Middle East to Europe, every country in the world is trying to reposition itself, to rewrite its part in the play. And this is true in geopolitical as well as economic and industrial terms. Indeed, perhaps here it is even more immediate. Because if in the power relations between nations much is still to be decided, for companies the reality has already changed, time has run out and the choice is forced. In the new context of the Trumpian era 'the little guys' are in danger of struggling. And to survive, and get bigger, companies can only have two roles: predator or prey. In reality, there is also a third way, possible in particular areas and sectors, of seeking and building strategic alliances that enhance synergies with minority shareholding agreements. But to paraphrase the famous Latin phrase: quartum non datur. There is no choice 'whether' to grow. One can only choose 'how' to grow. Even on the Italian pocket-sized multinationals, or SMEs, aggregation processes are accelerating because the most evolved entrepreneurs are well aware that today the choice is clear: either you go back to being a craftsman or you have to grow.

Today there are in fact three macro-markets, namely North America, China-East and Europe. This is not the end of globalisation, but its correction on a regional scale (the processes of nearshoring and reshoring have been going on for some time now) where competition is no longer between national companies, whether medium or large, but between global giants. And perhaps that is not even enough. To get an idea, let us look at the automotive industry. Stellantis is a multinational company with many brands (Fiat, Chrysler, Citroen, Peugeot, Jeep, Alfa, Maserati, Opel), yet it is in existential crisis. Volkswagen has incorporated Audi, Skoda, Ducati (as well as Porsche and Lamborghini) but is in such difficulty that for the first time in its history it is closing a plant in Germany. Of course, there is a kind of cultural decline of the automobile, yet Chinese batteries developed for the electric car according to the principle of economies of scale that favour investments and innovations, are putting European manufacturers in serious difficulty.

If one moves from the earth to the sky, there is the story of Airbus, which has brought together European aircraft manufacturers and is today the only player capable of competing with the American Boeing. Speaking of operators, the Old Continent's airlines only survive if they make 'alliances' (from Ita-Lufthansa to Iberia-British to Air France-Klm), as they have to contend with giants such as Emirates, Turkish or Qatar Airways in the East and with United or American Airlines in the West. And in Europe they even struggle to keep up with the low-costs. And it is in this perspective that one can read the announcement of the agreement in the defence sector on armoured vehicles between Leonardo and Rheinmentall. Because it is with these agreements that the gap in labour productivity, innovation, dynamism and investment that currently penalises the Old Continent is overcome.

On the other hand, the EU is a market of 440 million people, 23 million companies, producing a total of 17% of global GDP (as much as China) and spending more overall on defence than Putin's Russia currently at war. Yet in recent years it has seen its growth slow down. The GDP gap with the US has grown from 15% in 2002 to 30% in 2023. There are several reasons for this, but one is the fragmentation of supply chains and companies, which are not making critical mass to encourage investment and economies of scale. It is no coincidence that R& D spending over the past 15 years in Europe has remained virtually stable, while it has quadrupled in the United States. Nor is it a coincidence that Europe has become a land of conquest for Americans (Facebook, Google, Apple, Starlink) or Chinese (TikTok, Alibaba, DeepSeek) in the digital sector.

The emergence of 'European champions' is hindered both by European rules (as the failure of the marriage between Alstom and Siemens demonstrates) and by national jealousies (as the difficulties of aggregation in the European banking sector recount). However, entrepreneurs, managers and company leaders, abstracting themselves from political logic, can observe that in this new phase of globalisation, where competition is between macro-areas, aggregations, mergers, and partnerships are the destiny for those who want to continue to grow, innovate, export, and play a leadership role in markets and manufacturing. And this is especially true for Europe. On the other hand, ever since the Common Agricultural Policy and then with the ECSC (European Coal and Steel Community) and later with Maastricht, it is precisely on 'economic sharing' that the Union has proven to work best.