Advanced economies can no longer rely on their historical strengths to keep heavy industries like steel and chemicals competitive against rising global pressures. However, according to the authors of the newly released report, these nations could restore their edge by forming strategic partnerships that shift energy-intensive production to emerging markets while focusing on high-value, specialized manufacturing at home.
“Maintaining the status quo is a high-risk strategy for the least competitive advanced economies, requiring heavy subsidies with no assurance of restoring competitiveness. An alternative path may lie in strategic partnerships that divide supply chains to maximise each region’s strengths.”
In simple terms, trying to keep doing everything the old way is dangerous because it costs too much and might even require taxpayer bailouts that do not solve the underlying problem. Instead of trying to make everything from scratch, wealthy countries should team up with developing nations that have cheaper clean energy. Those partners would handle the heavy, energy-hungry parts of the process, while the advanced economies focus on the final, more complex steps of making specialized products.
The report “Energy Technology Perspectives 2026” was published by the International Energy Agency (IEA) in Paris, France. It was prepared by the IEA’s Energy Technology Policy Division under the direction of Chief Energy Technology Officer Timur Gül.
