Strategic autonomy is no longer aspirational for Europe; it is essential. The recently fractured global order has exposed Europe’s dependencies on US military support, Asian manufacturing, and Russian energy.

Transitioning to greater self-reliance is a necessity for Europe, but autonomy alone will not drive returns. Europe must also regain its competitive edge in innovation, productivity, and capital efficiency.

Even amid current political challenges, Europe remains strong enough to stand independently and compete with other global powers. Many European countries have already mobilized an unprecedented amount of investment. Germany’s large investment plan is part of a wider European effort called Readiness 2030, which includes significant spending increases in several countries and a total mobilization of up to €800 billion¹ for European security.

Private capital is also flowing into key sectors creating meaningful momentum particularly among mid- and small-cap companies often sitting at the heart of this transformation. At Nordea Asset Management, we believe this shift has created a unique window of opportunity for investors to capture the first stage of Europe’s long-term shift across three core themes.

Energy resilience

Europe is accelerating investment in critical infrastructure and energy systems to reduce external dependencies and strengthen long-term supply stability. Supported by the €300bn REPowerEU plan, these efforts include modernising power grids, increasing domestic resource recovery, upgrading inefficient building stock, and securing access to essential raw materials – all key components of a more self-sufficient and resilient energy landscape.

Building a robust and interconnected energy grid is crucial for Europe to achieve energy security and maintain economic competitiveness. In this context, Italian cables and telecommunications manufacturer Prysmian plays a pivotal role in modernising the infrastructure underpinning Europe’s energy security. Similarly, the French mid-cap Nexans plays an important role in ensuring Europe’s energy resilience. As a leader in a niche market, Nexans provides the subsea power cables enabling electrification and connection among different countries and sources.

Reshoring production

Europe is rebuilding its industrial base with a renewed focus on automation, robotics, and operational control. Significant investment in machinery, R&D, and intellectual property will be vital to restoring competitiveness, and the EU has earmarked about €100bn in reshoring incentives through 2030.²

As the EU currently imports around 15% of its steel, the sector remains a strategic vulnerability.³ Danieli, the Italian supplier of equipment and plants for the metals industry, is at the forefront of bringing steel production back to Europe. The company maintains a strong competitive edge through continuous investment in steel technologies and process innovation.

German multinational Siemens is another key enabler of Europe’s industrial transformation. As a leader in electrification, automation, and digitalisation, Siemens is helping to reduce reliance on foreign technology providers. Despite its strategic importance, the company trades at a discount to peers. With 60% of revenues coming from structural growth areas and steady cash flows, Siemens represents a resilient long-term growth story⁴.

Defence and cybersecurity

While NATO remains indispensable, recent events have underscored the risks of overreliance on external partners. In response, the EU Readiness 2030 plan aims to strengthen defence capabilities through investment in dual-use civil and military technologies, cybersecurity, and modern equipment. With NATO recommending defence spending of 3-5% of GDP – equivalent to €350bn annually across Europe – strategic autonomy has become a top priority.⁵

Swedish mid-cap Invisio, a trusted supplier to NATO and EU forces, offers proprietary technology for secure communications. With strong earnings, high margins, and additional growth potential through new product lines, Invisio stands to benefit further as the European Defence Fund allocates €8bn for next-generation technologies by 2027.⁶

Norwegian advanced-technology group Kongsberg is another European innovator. With the pending spinoff of its maritime business, Kongsberg will fully focus on defence and technological solutions.