French industry facing the rest of the world: challenges and opportunities

DeepSeek vs OpenAI, the inauguration of the 47th President of the United States, Donald Trump, and his grand declarations on economic sanctions, radical economic reforms in Javier Milei's Argentina... The news is rich at the beginning of 2025, including in the manufacturing industry.

The observation of the year 2024 is clear: industrial investment worldwide fell by 37% compared to 2023, according to the 9th edition of the Global Industrial Investment Barometer, produced by Trendeo, McKinsey and the Institute of Reindustrialization.

The impact varies by region: some are experiencing growth, others are stagnating, while others are suffering a sharp decline, leading to unequal economic consequences globally.

This decline has its origins in several factors. The last few years have been marked by major crises such as the pandemic and various conflicts that have disrupted supply chains and accentuated persistent economic uncertainty.

In this context, it is urgent to act. Some measures have already been taken and others are being considered to promote growth. In France, as elsewhere, questions abound: what is our place facing giants like the United States and China? Where do we stand within Europe? Will the reindustrialization initiated since 2017 allow us to catch up?

If the COVID-19 crisis has left scars, it is essential to analyze the evolution of the French situation on a global and European scale, while anticipating future challenges and opportunities.

To better understand current industrial dynamics, it is essential to analyze how major economic powers are shaping global industry.

Industry in the world

The economic rivalry between China and the United States of America fuels many debates. The French media largely echo this, and for good reason: in terms of GDP, these two countries dominate, ahead of the Eurozone, according to the latest update of the World Economic Outlook of January 2025.

The industrial sector does not escape this competition. The United States is the leading destination for Foreign Direct Investment (FDI), particularly thanks to European companies. The country encourages the installation of foreign investors with incentives, such as tax credits and the Inflation Reduction Act. Donald Trump wants to reduce the tax rate to 20%, then to 15%, to relocate industrial production.

In Asia, two dynamics are opposed: China continues to see its industrial investments fall (-41% in 2024, against -54% in 2023), while India records a spectacular increase of 140%, driven by digital transformation and exports, according to the Global Industrial Investment Barometer 2024.

China pursues its ambition to dominate strategic sectors such as robotics and AI, with DeepSeek. Its aggressive strategy relies on massive subsidies to companies, allowing it to break prices and increase its market share, although nearly 30% of its companies are in deficit. As the leading producing power, it recorded a record of exports in 2024 (+7.1%), according to statements by a spokesperson for Chinese customs at a press conference in January 2025, reported by La Tribune.

These strategies differ from those implemented on the Old Continent, which is trying to keep up with these giants.

Industry in Europe

Outside the European Union, trends diverge:

• The United Kingdom is turning towards services, but its industrial sector continues to decline.
• Russia is investing massively in armaments, textiles and electronics, but galloping inflation affects purchasing power.

In the EU, foreign investments increased by 10% to 12% between 2023 and 2024. Europe stands out for its lead in R&D and its strict environmental policy. Ecological and digital transition is a priority, with the adoption of the Net Zero Industry Act in 2024.

According to the European Union website:

“Investing in research and innovation means investing in Europe's future. These investments allow Europe to be competitive globally, to maintain its unique social model and to improve the daily lives of millions of people.”

At the state level:

• Italy is experiencing a spectacular evolution, now occupying 4th place in world exports. Its industrial sector, which represents 18.1% of Italian GDP in 2024, according to the EI Portal, relies on autonomous districts composed of SMEs.
• Norway reached a record level of gas production (124 billion m³ in 2024), strengthening its position as the main European supplier.
• German industry is losing competitiveness, faced with the rise of China, high energy costs and a lack of qualified labor, among others.

Just like its German partner, France is experiencing turbulence that forces it to question itself.

Industry in France

France is the 5th global industrial player and the 3rd in Europe. According to bpifrance, 70% of its exports come from industry. However, some sectors, such as aerospace and automotive, suffered in 2024. Others, such as aeronautics, are strategic for the French economy.

To face these difficulties, the government is betting on an ambitious reindustrialization policy. In October 2021, the President of the Republic, Emmanuel MACRON, unveiled the France 2030 investment plan. The French State wants to revitalize its industrial sector, which alone represents nearly 17% of GDP according to World Bank data.

Endowed with 54 billion euros deployed over 5 years, France wants to develop its industrial competitiveness and future technologies.

See blog article: Reindustrialization in France is not dead

In this dynamic, a fabric of innovative startups emerges in the nuclear field, with companies like Jimmy Energy, Calogéna, Stellaria and Naarea. These actors are developing new generation technologies, capable of revolutionizing the energy sector.

The race for AI has not spared France. The Head of State announced an investment of 109 billion euros in the coming years. Manufacturing AI is gradually finding its place, and projections estimate that this market will reach 230.95 billion euros by 2034 globally, according to Precedence Research.

Faced with these challenges, French industry must accelerate its transformation, innovate and attract talent to stay in the race against major industrial powers. Opportunities are numerous, and France has the necessary assets to impose itself in the industry of the future. However, the latest statements by President Donald Trump regarding taxes on European Union products create a climate of uncertainty.

More globally, the digital transition still represents a major strategic issue in France. To remain competitive against giants like China, France must increase its productivity and strengthen its technological independence.

olome thus positions itself as a key player in this digital transformation, by offering solutions that facilitate the operational management of companies in strategic industrial sectors, such as nuclear and agri-food. Decisive for competitiveness, olome helps accelerate what currently represents a brake on the development of the industrial sector. The shift towards digital, AI and automation are no longer an option to compete with countries like China or the United States of America.

Conclusion

In a rapidly changing world, French industry is at a turning point. The statements of the President of the French Republic during his speech on March 5, 2025 may create doubt with a speech recalling the unstable situation in which Europe finds itself. He announces the advent of a "new era" and calls to prepare for changes because, according to the Head of State, "tomorrow's solutions can no longer be yesterday's habits".

Between competitiveness, ecological and digital transition, reindustrialization, armaments, challenges are numerous. Rich in twists and turns, current events remind us of the connections and interdependencies between regions of the world. Ambitions collide with economic and geopolitical uncertainties. Increased competition from the United States and China, trade tensions and challenges related to talent attractiveness force France to redouble its efforts to remain a major player in global industry.

However, opportunities exist: technological innovation, strategic investments and positioning on future markets offer promising prospects. As for the aeronautical and armaments sectors.

In this context, solutions like those proposed by olome make perfect sense. By facilitating the digital transition and operational management of industrial companies, they allow improving productivity, traceability and process efficiency.