Strategic autonomy: a new engine of European growth

L’autonomie stratégique repose sur la capacité à préserver l’accès à des ressources, infrastructures, et technologies essentielles. Loin d’entraîner un isolement économique ou un protectionnisme, elle constitue une voie permettant de soutenir la croissance grâce à la diversification, à l’innovation et au renforcement des capacités stratégiques.

Cette dynamique se traduit par le fait que l’innovation, l’autonomie et la résilience sont devenues les pierres angulaires de la stratégie de la Commission européenne (CE) en faveur de la stabilité économique et de la compétitivité à long terme.1 Les récents événements géopolitiques ont encore renforcé l’urgence et l’opportunité de soutenir la croissance durable de l’Europe.

The economic opportunity set is increasingly being complemented by a rise in European investment funds dedicated to autonomy sub-themes – see diagram. Investing in autonomy also provides exposure to broader themes such as diversification and de-dollarisation.

We believe Europe is well positioned to fund solutions to challenges such as innovative medicines and protection from energy shock impacts. It has an estimated EUR 10 trillion of household savings held in low-return bank deposits.2 The European Union (EU) also recognises that underdevelopment of pension funds and future retirement funding challenges is a result of low investment rates across the region.3 Mobilising even a modest portion of these savings towards productive investment could support both Europe’s strategic priorities and long-term retirement financing outcomes.

Our investment approach incorporates eight key areas where strengthening capabilities, policy alignment and resources could significantly influence Europe’s competitiveness, resilience and security (see our previous article).

While presented separately, these factors are highly interdependent – supporting a diversified framework for autonomy investing to support European sovereignty.

A recent Barclays Equity Research report highlighted that geopolitically led thematic funds, covering security, deglobalisation and regional investment themes, had seen the largest percentage uplift in thematic AUM allocation in Q1 2026. Strategic autonomy is increasingly being embedded into public spending commitments, industrial policy initiatives, regulatory support and private-sector capital expenditure. For investors, this creates exposure to long-term structural growth drivers across multiple sectors. Below we outline investment opportunities within the eight factors mentioned earlier:

Energy

In the early days of the conflict in the Straits of Hormuz, we highlighted the pressing strategic imperative of energy autonomy. It is difficult to quantify the extent to which this conflict has further exposed the structural vulnerability in powering Europe’s economy, but it reinforces why energy autonomy remains a core pillar of strategic autonomy.

Europe’s energy policy is increasingly reflecting a more pragmatic balance between affordability, competitiveness, decarbonisation and security of supply. The region’s energy system is extending beyond the availability of renewable generation to a broader industrial base of engineering, efficiency solutions, grid connectivity, infrastructure and storage. This will enable diversification but also drive the interconnectivity of different energy systems. The EC estimates annual energy transition investment needs of EUR 660-695 billion through to 2040.⁴

What we look for: Our focus is on technologies that can improve both security of supply and system efficiency. This includes grid infrastructure, power transmission equipment, energy storage, electrification technologies, industrial efficiency solutions, and engineering services that enable the integration of increasingly diversified energy sources as the sector transitions to a cleaner mix.

Defence

Geopolitical tensions have accelerated investment in defence. Morningstar has estimated Europe’s core defence budget target as a share of GDP to rise from 2.3% in 2025 to over 4.5% in 2035 – which translates into actual spend rising from approximately EUR 380 billion to over EUR 1.1 trillion⁵. NATO’s formal 5% of GDP target by 2035 comprises:

• 3.5% for core defence – this includes improvement in capabilities and readiness for land, naval and aerial combat systems, geospatial technologies, unmanned systems and preparation for digital transformation.
• 1.5% for broader security infrastructure – cybersecurity, digital resilience and advanced data and surveillance systems.

The autonomy opportunity in defence extends beyond traditional prime contractors to a broader ecosystem of enabling technologies and critical suppliers.

What we look for: We see attractive opportunities across enabling technologies including secure communications, sensing and radar systems, electronic components, geospatial intelligence, cybersecurity, and autonomous systems. These capabilities support the modernisation and digitalisation of defence infrastructure while also having broader civil and industrial applications.

Healthcare

Healthcare systems are critical national infrastructure⁶, underpinning economic continuity, productivity, and crisis mitigation and response. This has been underlined by the OECD in “Health as an Economic Imperative”, while the World Economic Forum has warned of rising healthcare costs and loss of life related to climate change.⁷

Healthcare resilience is increasingly recognised as a productivity issue as well as a public health issue. Workforce participation, ageing populations and chronic disease management all influence long-term economic competitiveness.

In Europe, core health investment initiatives like the EU4Health Programme, Horizon Europe and the European Health Data Space are looking to promote and advance resilient and digital healthcare infrastructure. Measures like the Biotech Act, Safe Hearts Plan and pharmaceutical legislation focus on medical innovation.

Europe’s off-patent and generic pharmaceutical sector is heavily exposed to supply chain shocks, with a reliance on active pharmaceutical ingredients from Asia. One approach to addressing this is the proposed EU Critical Medicines Act, targeting the availability of essential medicines by managing shortages and reshoring production.⁸ Europe is also pushing forward with regulation of biosimilar medicines, allowing for both greater resilience and healthcare system expenditure savings.

What we look for: Healthcare autonomy is supported by companies involved in diagnostics, laboratory technologies, medical devices, healthcare IT, pharmaceutical manufacturing capabilities, biosimilars and supply-chain resilience solutions. These technologies contribute to both innovation and the security of Europe’s healthcare systems.

Technology

European technology is now estimated to be worth EUR 4 trillion – equivalent to 15% of European GDP – and spans almost 40,000 funded tech companies.⁹ This reflects not only the scale, but also the depth of Europe’s tech capability base.¹⁰

In its Digital Decade Policy Programme 2030, the EU defines digital transformation through four pillars: digital infrastructure, digitalisation of businesses, digital public services, and digital skills. The goal is to secure and anchor economic and industrial growth and value creation through a well-invested, secure and highly connected European digital infrastructure.

What we look for: Europe already occupies global leadership positions in several critical technologies including semiconductor manufacturing equipment, industrial automation, and enterprise software-providing strong foundations on which strategic autonomy can build.
The digital infrastructure pillar is core to European policy. In addition to innovation leadership its strategic importance includes developing, operating and securing the digital infrastructure required for the modern economy and public services. The technology opportunity extends beyond artificial intelligence and semiconductors. We also see strategic value in digital infrastructure, industrial software, cybersecurity, cloud technologies, automation, connectivity and data management solutions.

Climate Resilience

Water scarcity, agricultural disruption, infrastructure damage and health impacts underline the necessity for climate adaptation to secure economic resilience. We believe adapting to the impact of current temperature rises, as well as future temperature scenarios is as essential, alongside climate change mitigation. As introduced in our paper on physical climate risks, adaptation has several implications: in 2024, the European Environment Agency provided a warning that Europe is the fastest warming continent in the world, with climate risks threatening energy, food, infrastructure, water, financial stability and health systems.

The EC estimates around EUR 70 billion per year is needed for climate adaptation up to 2050, including infrastructure, ecosystems and food security. It identifies France, Germany, Italy and Spain as having the largest adaptation needs.

The EC has identified an annual investment gap of EUR 23 billion in water investments in Europe,¹¹ yet the region is a global leader in water technology, holding 40% of all patents globally.¹²

What we look for: The opportunities include water treatment technologies, flood protection infrastructure, environmental testing, and engineering services to support climate adaptation. A similar opportunity in food resilience exists with European agri-food chains generating over EUR 1 trillion in gross value to the EU economy.¹³

L’autonomie stratégique, autrefois simple aspiration politique, devient un thème économique et d’investissement déterminant pour l’Europe. Le renforcement de la résilience dans les domaines de l’énergie, de la santé, des infrastructures numériques, des capacités de défense et de l’adaptation au changement climatique nécessitera un déploiement soutenu de capitaux sur les marchés publics et privés. Pour les investisseurs, cela ouvre un champ d’opportunités large et diversifié, aligné sur les grandes tendances structurelles les plus importantes qui façonneront la compétitivité, la sécurité et la prospérité futures de l’Europe. L’accent est désormais mis sur les domaines où l’innovation, le soutien politique et les capitaux peuvent se conjuguer pour développer les capacités dont l’Europe aura besoin au cours des décennies à venir.

1. Commission européenne, LIFE : stimuler l’innovation, l’autonomie et la résilience pour une Europe compétitive, mai 2026
2. Commission européenne, « Union de l’épargne et de l’investissement : de meilleures opportunités financières pour les citoyens et les entreprises de l’UE », mars 2025
3. Commission européenne, Le rapport Draghi sur la compétitivité de l’UE, septembre 2024
4. Commission européenne, Investissements dans les énergies propres, 2026
5. Conseil européen, La défense de l’UE en chiffres, 2026
6. Allianz Global Investors, Santé : investir dans la résilience, mai 2026
7. Forum économique mondial, « L’Europe paie pour se rendre malade – et la facture de santé le prouve », mai 2026
8. Conseil européen, « Nouvelles règles pour les médicaments essentiels dans l’UE », 2026
9. Invest Europe, État des lieux de la technologie européenne 2025, Une feuille de route pour stimuler la croissance, novembre 2025
10. État des technologies européennes 25 Le moteur des talents en Europe, 2026
11-12. Commission européenne, Questions et réponses sur la stratégie de résilience hydrique, juin 2025
13. FEFAC, DÉCLARATION COMMUNE : Un programme ambitieux en matière de compétitivité de l’UE doit placer l’avenir de la filière agroalimentaire européenne au coeur de ses priorités, 2026