Capitalizing on Change: Financing Manufacturing in the 21st Century
Hiram Samel Senior Lecturer, MIT Sloan School of Management
Automation, AI, and the global drive for carbon reduction are transforming manufacturing, yet capital market allocation remains misaligned with the sector’s evolving needs. The U.S. and Europe take distinct approaches: both deploy industrial policies to achieve strategic autonomy, with the U.S. leveraging larger pools of private capital alongside public incentives, and Europe prioritizing sustainability-focused funding as a key pillar of its industrial strategy. However, the tension between institutional investors’ preference for efficient, asset-light models and the significant capital expenditures required for transformative manufacturing presents a substantial challenge. Engaging capital market investors early, supported by innovative business models, refined narratives, and industrial policy, is essential to mobilizing larger funding pools of capital that advance strategic priorities.