For a long time, it was considered a foregone conclusion: cheap products come from abroad. Often enough, this was also the reason for opening up international supply chains. The war in Ukraine and the coronavirus crisis have shown how vulnerable our economy is. Can we free ourselves from these supply chains? What about Europe as a location for innovation? What are the advantages of producing locally? And how does all this influence our purchasing decisions? A stocktaking.

Text: Jochen Overbeck

The first has a lot to do with identification. We have an image in mind when we think of European products. An Italian hat factory. A glass-blowing factory in Finland. A car manufacturer in Germany: we know about the history and tradition of these companies. The hat from the Marche still resembles the one worn by workers in the fields 100 years ago. The glass from Finland is a design that was already a success at the Milan Triennale in the 1950s. At the same time, European companies are continuing to develop: 50 years ago, the car manufacturer from Germany stood for cars that ran, ran and ran. And today? It is regarded as a globally respected driver of innovation. All these examples show how tradition and progress are often intertwined in Europe and help to define our identity. Sometimes, however, we also fall prey to our Eurocentrism. Despite the cheap goods that jump out at us every day from ads on Facebook, Instagram and the like, it is by no means the case that a product made in Asia is automatically worse than a European one.

But we rightly trust what we think we know. Manufacturing in Europe follows a common set of values that has manifested itself in certain standards. These concern products - such as their energy efficiency or materiality - but also the circumstances of their manufacture. For example, there is a statutory minimum wage in 21 out of 27 EU countries, and the EU Supply Chain Act applies throughout the EU. It is intended to ensure that human rights and environmental protection regulations are observed. All of this provides us citizens with security and reliability when making purchasing decisions. The third reason is related to the first two: In most cases, a locally manufactured product is more sustainable. Shorter transportation routes reduce delivery times and lower a product's carbon footprint. Communication and quality assurance are simpler, which leads to a longer service life. None of these are new ideas. But for a long time, they were only relevant for a small number of German companies, as it was often said from the 1990s at the latest: good is what saves costs. And you save costs if you buy or produce where it is cheap. Stinginess is cool, many will remember.

The crises of the past three years show just how fragile this model is: even those who are not aware of the large flows of goods will have read the small messages. In November 2022, for example, Apple was forced to post a notice on its website: Due to Covid-19 restrictions in Zhengzhou, China, shipments of the iPhone14 were lower than forecast.The Russian war against Ukraine also had an impact on trade: Many trade routes passed through Russia, Belarus and Ukraine. Products arrived too late or not at all. The consequences are more immediate when it comes to goods from the countries involved: Germany's winegrowers, for example, were confronted with rising glass prices after the start of the war: The glass often came from Ukraine. In turn, glass produced in other European countries became even more expensive than before due to the rise in energy prices. The prices of paper, wood and industrial metals also came under pressure. In the face of this cost explosion, large retail chains questioned practices that had previously been considered irrevocable - such as the millions of printed weekly advertising brochures. Another disaster also underlined the extent to which we are dependent on the international commodity economy: In March 2021, the container freighter "Ever Given" ran aground in the Suez Canal. The canal proved to be a - now blocked - bottleneck. 422 ships were stuck in traffic jams around this most important passage for international shipping. The delay in unloading the goods continued to have an impact for months and presented ports and the shipping industry with immense logistical challenges.

One of the strongest images of the accident showed an excavator that looked like an orange children's toy next to the large freighter. The construction equipment and the giant pot quickly became a meme: If one cog gets stuck, the entire machinery of the global economy grinds to a halt. The bad news is that this situation is unlikely to change much in the next few years. Or is that actually good news? "Companies need to rethink", wrote Handelsblatt back in 2021, and continued: "Global trade has become fragile - the illusion that every product is available at every location to the minute is shattering." New opportunities are indeed emerging from this crisis. One term that has recently become increasingly common is "reshoring". This is the term used to describe the relocation of production facilities back to Europe. The fact that reshoring has become an issue is not only due to the aforementioned uncertainties, but also to increased transportation costs. These quickly outweigh the financial benefits in other areas, such as wages.

Pictures: Michael Hausmann, iStock; Timo Juntilla; Fertning, iStock; SolStock, iStock

A few figures: 70 percent of European active pharmaceutical ingredients come from China. So do 80 percent of our laptops and 70 percent of our cell phones. Our exports to China are manufactured in Germany by one million workers. So the dependencies are enormous and there are no simple solutions. It's time for us to focus on our own skills! Six examples of regionally manufactured products and the story behind them.