Strategic Sectors & Industrial Policy
Special Reports | Autumn 2026 Edition
Evidence Before Regulation: VDMA on Reducing Complexity and Anchoring European Engineering Competitiveness
An executive dialogue on regulatory complexity, investment crowding-out effects, and bridging the policy gap.
A conversation with Holger Kunze, Head of the VDMA European Office
BY AIDA IORDACHE • NOVEMBER 5, 2026
The structural capacity of European advanced engineering to innovate and scale depends directly on the predictability and simplicity of its operational framework. While machinery enterprises remain determined to design the next generation of technological solutions, they navigate an expanding matrix of cumulative regulatory complexity that risks crowding out essential R&D and digital investments.
To safeguard the continent's competitive edge, the dialogue between policy design and industrial reality must shift from interventionism toward building robust, open market conditions. In this exclusive briefing for our Autumn 2026 Edition, we analyze these structural levers alongside Holger Kunze, Head of the VDMA European Office.
Representing over 3,500 machinery and equipment manufacturing enterprises anchoring nearly 3 million jobs, VDMA continuously emphasizes that evidence-based policymaking and trade predictability are the true drivers of long-term economic resilience. Below, Holger Kunze outlines why reducing compliance costs at the source and testing regulatory ideas against the factory floor are critical prerequisites for core European enterprise design.
1. Safeguarding Advanced Engineering Competitiveness
The Gazette: As the new institutional cycle intensifies, European machinery manufacturers face the complex task of meeting heavy regulatory mandates while competing against heavily subsidized global markets. What primary industrial policy levers must the Commission prioritize to preserve the competitive edge of European advanced engineering?
Holger Kunze: Europe does not need more industrial policy intervention; it needs better conditions for industry to compete. The Commission should focus on three levers: radically reducing regulatory complexity, making Europe an attractive place to invest and innovate, and keeping global markets open.
The European machinery industry thrives on competition, innovation and scale, not on protectionism and permanent subsidies.
“Europe’s strongest industrial policy is therefore a strong Single Market combined with an ambitious trade and innovation agenda.”
2. Supply Chain Resilience and Capital Strains
The Gazette: Navigating complex EU compliance architectures requires massive administrative overhead and data tracking for manufacturers. How can engineering enterprises successfully absorb these regulatory costs without shifting investment capital away from core R&D and digital scaling?
Holger Kunze: Companies, in particular SMEs, cannot currently absorb the regulatory costs without cutting investment elsewhere, and it is a major problem for Europe’s competitiveness. Companies should not have to choose between compliance and innovation.
If regulatory costs start crowding out R&D and digital investment, we jeopardize our industrial future. The Commission must therefore reduce complexity and compliance costs at the source.
“European manufacturers need to have the freedom to design the next generation of machines, not spending significant time navigating regulation.”
3. Strategic Public Affairs in Shifting Markets
The Gazette: With trade enforcement becoming increasingly unilateral, the nature of industrial advocacy is changing fast. How must public affairs and corporate communications strategies evolve to effectively bring empirical, manufacturing data to the table before draft regulations are locked in?
Holger Kunze: We need to close the gap between the Brussels policy debate and the factory floor. Too often, industry is consulted when the basic political choices have already been made.
Public affairs and corporate communications therefore need to provide policymakers with data, practical use cases and impact assessments much earlier in the process. And policymakers need to systematically test regulatory ideas against industrial reality before putting them into legislation.
The VDMA European Office is continuously committed to building bridges bringing industry representatives together with EU policymakers through a wide range of activities.
“Evidence must come before regulation, not after it.”
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