Manufacturing in the Mediterranean: Turkey is catching up with Milan

In third place is the Catalan polycentric system: Barcelona leads the way in management, pharmaceuticals, technology, design and R&D; Baix Llobregat stands out for the automotive sector, components and mechanical engineering; Vallès is the stronghold of electronics, machinery and life sciences; Tarragona is a hub for the chemical and petrochemical industries; Girona specialises in food, packaging and mechanical engineering; Lleida focuses on agribusiness.

Close behind is Bologna, with Emilia-Romagna proving to be by far the most efficient regional system in relation to its population. It therefore competes not on volume but on value: with packaging, excellence in mechatronics and the legendary Motor Valley, which create technological barriers and high profit margins.

Israel cannot compete with Lombardy, Catalonia or the Marmara region in terms of manufacturing output, but it leads the way in terms of R&D density: electronics, radar, missiles, air defence, sensor technology, semiconductors, avionics, medical devices and software.

The in-depth report (which we summarise here, whilst referring you to the full-length version online) outlines five future scenarios.

The first is based on momentum: barring any major upheavals, the manufacturing hubs in 2035 will remain Milan-Lombardy, Marmara, Catalonia, Emilia-Romagna, Tangier-Kenitra and Tel Aviv-Haifa. Europe retains its qualitative leadership, Turkey and Morocco increase production, whilst Israel strengthens its defence and tech sectors.

The second scenario envisages an acceleration of European industrial growth. The prerequisites? Pmore competitive energy prices, full implementation of the Chips Act and industrial policies, increased defence spending, reshoring, upgraded electricity grids and less bureaucracy. Italia would benefit from this, with Milan and Bologna taking the top two spots on the podium.

The third scenario, accelerated nearshoring, posits that European production will shift from Asia to the Mediterranean (through trade agreements and investment in ports and industrial estates). The main beneficiaries? Tangier-Kenitra, Tunis, Skopje, Tirana-Durrës, Sarajevo, Thessaloniki and Marmara. In this context, the risk for Europe is that it will lose ground in terms of production and skills.

Fourth scenario: energy and climate crisis. A worsening of climate change, combined with a spike in energy prices, would adversely affect Tarragona, Taranto, Oran-Arzew in Algeria, Sfax in Tunisia, industrial Morocco, Catalonia, Turkey and Sicily. Regions with better access to a stable electricity supply, interconnected grids, nuclear power or domestic gas would, by contrast, be relatively favoured. As well, of course, as industries with lower energy intensity.

The fifth scenario is that of geopolitical fragmentation. A clearer division between blocs would benefit the Israeli and Turkish defence sectors, the aerospace and semiconductor industries in Europe, local suppliers and secure ports. Conversely, systems reliant on Chinese components, volatile foreign capital, vulnerable shipping routes or imported energy would struggle.

Let’s take stock. The industrial capital of the Mediterranean in 2035 will need to be able to manage energy, technology, human capital, intellectual property, critical components, logistics and access to markets. This is a demanding goal to achieve, and the challenge remains very much open.

Read the Longform 24+