The pursuit of economic leadership and the ability to set global rules have become defining aspects of modern geopolitics. Today, the most powerful states and blocs—China, the European Union, and the United States—compete to control innovation, industry, and technology. According to the "techno-nationalist logic," these powers strive to dominate critical technologies essential for a new industrial revolution driven by digital innovation and energy transformation.

After years of globalization driven by market forces, free trade, and "techno-globalism," governments are once again taking center stage in industrial development. They are amplifying their power by promoting innovation, industry, and technology, whose control is now considered a matter of national security. Measures such as tariffs, subsidy programs, export controls, monetary policies, energy strategies, mineral resources management, sanctions, and oversight of foreign investments have become focal points for national leaders. In contrast to the globalized economic trends of the past thirty years, these actions reflect a shift toward regionalization, with the aim of decoupling economic relations between states and blocs.

By restricting the movement of labor, services, technology, goods, and knowledge, the great powers seek to gain geopolitical advantage and consolidate spheres of influence. In doing so, they often use extraterritorial legal frameworks that disregard national borders. This is particularly evident in sanctions and the enforcement of regional norms and standards.

"Industrial power" is emerging as a decisive factor in the relations between techno-nationalist states. French economists Patrick Cappe de Baillon and Philippe Clerc define this concept as the ability to establish strategic industrial ecosystems to control global economic and technological rules. Such power allows governments to advance forms of capitalism aligned with their ideological visions. The ongoing economic and social transformations are fostering a return to "political capitalism," where political authority and economic interests are closely intertwined.

Today's political capitalism, underpinned by innovation and industrial policy, lies at the heart of geo-economic competition. Key components include research and development, support for start-ups, the creation of national champions, and investment in strategic sectors critical for economic and military security. In 2012, American economist Richard D'Aveni warned of the rise of "managed capitalism," led by high-powered players such as China. China, he argued, is poised to replace the United States as the leader of the global economy, enabling it to dictate the rules of economic and industrial competition. "If the West does not act swiftly, it risks losing financial prosperity, economic freedom, geopolitical power, national security, and even democratic values," D'Aveni cautioned.

The main characteristics against which the power of economic powers can be assessed include:

• Define and enforce fundamental rules of capitalism that all stakeholders must follow.
• Convince and assist others to adapt their capitalist models to align with the hegemon's system.
• Influence the economies of rivals who adopt alternative forms of capitalism.
• Shape global economic systems, business models, international currencies, financial networks, industrial ecosystems, norms, and intellectual property regulations.

The collective West, led by the United States, operates on these principles. In contrast, China seeks to disrupt this alliance by gaining influence over pro-Western countries and establishing dominance in international economic institutions. China's efforts include creating its own institutions outside Western control, such as the Asian Infrastructure Investment Bank (founded in 2014), which competes with the Asian Development Bank, the International Monetary Fund, and the World Bank in the Asia-Pacific region.

For too long, the United States and Europe relied solely on market forces in their economic dealings with China. Only recently have they recognized the risks of China's monopolies in areas like rare earth mining and industrial production. However, de Baillon and Clerc note that Chinese manufacturers still depend on U.S. semiconductor technology, hindering their innovation and research capabilities. For example, U.S. chipmaker Nvidia holds a 90% share of the Chinese advanced graphics processor market.

The U.S. regards control of critical technologies as a cornerstone of its global power. Its industrial strategy includes numerous laws aimed at enhancing federal funding for research and advanced industries. These include the Endless Frontier Act, the Strategic Competition Act, and the United States Innovation and Competition Act. Passed since 2020, these laws reflect growing concerns over China's technological ascent. Additionally, the CHIPS and Science Act promotes semiconductor and quantum computing innovation, while the Inflation Reduction Act offers financial incentives to domestic industries and encourages foreign talent and investment from allied countries to relocate to the U.S.

The European Union (EU) has responded to global industrial shifts with its concept of strategic autonomy. EU leaders recognize the need to adapt their development model to the realities of regionalization. This includes redefining the roles of governments, markets, technology, and industry in the Union. Discussions also center on Europe's place in the global economy and its role in shaping international relations.

The EU’s new industrial strategy is built around 14 industrial ecosystems, including aerospace/defense, agriculture/food, and trade. It incorporates tools such as industrial alliances (batteries, hydrogen, industrial data, semiconductors), monitoring strategic dependencies, a robust standards policy, and major projects of common European interest. In June, the European Commission unveiled an economic security plan emphasizing competitiveness, risk mitigation, and supplier diversification. The plan also includes stricter foreign investment screening, export controls, support for dual-use technology development, and enhanced research security.

However, structural weaknesses persist. Former Italian Prime Minister Enrico Letta has highlighted the wealth gap between the EU and the U.S., with U.S. GDP growth rates (1993–2020) outpacing those of the eurozone by 50%. Rising energy costs and post-pandemic challenges have further eroded Europe’s competitiveness. Letta warns that the EU risks falling behind, while Mario Draghi has criticized the Union’s organizational and decision-making frameworks as outdated and ill-suited to modern global power dynamics.

Political decisions by competitors are driving industrial production away from the EU, leading to increased investment in stronger companies abroad. U.S. tariffs on Chinese products, such as electric cars and solar panels, have redirected these goods to European markets. Meanwhile, European industries increasingly relocate production to regions with lower labor costs, such as Eastern Europe or North Africa.

For the EU, weakened industrial capacity, geopolitical indecision, and growing geo-economic dependence place it at risk of falling behind both the U.S. and China. To avoid this outcome, Europe must urgently address its structural deficiencies and take decisive action to strengthen its industrial and technological base.