Europe’s industrial foundation, long built on precision, process discipline, and technological leadership, is facing a moment of strategic reckoning. A new generation of global challengers – particularly from China – has not only entered the field but redefined the pace of competition. Their most potent advantage is not simply lower costs, but the sheer speed at which they develop, test, and launch new products. In the past five years, Chinese mechanical engineering firms have tripled their revenue and increased exports to Europe by over 70 percent. More strikingly, their products reach the market 50 percent faster – and at 30 percent less cost – than those of many European rivals (based on analyses by Porsche Consulting).
This shift is not the result of incremental efficiency gains. It reflects a fundamental redesign of how Research and Development (R&D) is organized. Modular platforms, streamlined governance, and digital-first development practices enable a pace of iteration that traditional models, focused on exhaustive validation and layered alignment, struggle to match. In today’s compressed product cycles, the ability to move quickly from idea to launch defines who sets the standard – and who follows.
The C-suite sees the urgency – but transformation is still too slow
This shift has not gone unnoticed at the top of European companies. Surveys across industrial sectors consistently show that development speed and cost are now dominant themes in the boardroom. While 2022 only 57 percent considered R&D cost reduction as mission-critical, already 79 percent of executives flagged this point in 2024 (based on analyses by Porsche Consulting). A similar share sees time-to-market acceleration as an urgent priority, with importance rising dramatically in recent years.
Yet despite this strategic clarity, the operational reality in many companies tells a different story. Development projects are often slowed by decision bottlenecks, unclear scope, and insufficient standardization. Feedback from market and customer insights is considered too late to be actionable. Software capabilities remain underdeveloped or isolated, and global development footprints continue to reflect historical growth patterns rather than strategic intent.
A critical disconnect has emerged. Senior leadership calls for agility, but development systems are still optimized for stability. The result is friction. R&D teams operate under outdated assumptions about risk, complexity, and control – while competitors move faster, test earlier, and learn more with each cycle.
Understanding what holds R&D back
To accelerate, organizations must first acknowledge the systemic obstacles embedded in their current operating models. One major barrier is governance complexity. In many firms, key product decisions require approval from multiple committees, delaying resolution and dispersing accountability. Closely linked is the lack of platform-based development. Without standardized architectures and reusable components, each product generation begins almost from scratch, increasing both cost and time.
Another limiting factor is the underutilization of digital tools. Despite widespread availability of simulations, virtual prototyping, and digital validation technologies, many development teams continue to rely on sequential, hardware-heavy processes. In parallel, global R&D capacity is often concentrated in high-cost regions, missing opportunities for distributed development models that could unlock both cost savings and cycle time reductions.
Finally, the human dimension plays a decisive role. Cultural norms that reward caution over speed, and process compliance over outcome focus, often remain deeply rooted. Empowerment tends to be promised, but not structurally supported. These cultural dynamics, while harder to quantify, often have the most direct impact on development velocity.
What actually works: four dimensions of transformation
Organizations that are successfully transforming their R&D operations are not simply investing in tools – they are rethinking how strategy, process, structure, and culture interact to enable speed.
The first dimension is the product strategy. Companies focused on speed shift away from bespoke engineering towards modular, platform-based approaches. Instead of customizing every product from the ground up, they design around reusable elements and make clear decisions about which capabilities to build internally, which to outsource, and where to partner. Innovation becomes focused and deliberate, aligned with product lifecycles and customer value perception – not driven by technical aspiration alone.
Processes and methods form the second dimension. Accelerated development requires structure – not more steps, but more clarity. Organizations that define fixed development timelines based on product type, frontload requirements definition, and integrate short-cycle feedback loops create predictable flow without stifling creativity. Simulation and virtual validation reduce dependence on physical prototypes and allow earlier decisions. Crucially, these processes are governed by explicit phase gates, enabling early termination of low-value projects before they consume critical resources.
The third lever is the organization. Companies serious about time-to-market invest in lean governance, with fewer interfaces and faster decision escalation. They establish clear roles, especially in cross-disciplinary areas like systems and software engineering, and ensure that teams operate with consistent resources and end-to-end accountability. This clarity enables faster handoffs, reduces coordination overhead, and builds ownership where it matters.
None of the above points can succeed without the fourth dimension: people and culture. Speed is not only about processes – it’s about mindset. High-performing organizations encourage entrepreneurial thinking, allow for controlled risk-taking, and reward initiative over compliance. They invest in software and data capabilities and create working models that enable global collaboration in real time. Rather than seeing speed as a threat to quality, they embed it as a value to be protected and cultivated.