This thesis concerns European and international economics and, although special effort has been made to avoid the use of technical jargon, presumes a degree of prior knowledge of economic theory. That said, this thesis recognises that economics proceeds within a political context. In contradistinction to academic economists, this thesis treats economics as more something much more than a positive science, adopting a holistic approach in which institutions, interests and perceptions are considered to play a creative role in the economic process. The thesis has a strong policy orientation, particularly with respect to industrial strategy, although it does address more theoretical issues. The thesis is meant as a contribution to the debate concerning the nature and future development of the European economy within the wider internationalisation of the global economy. This thesis examines a range of issues raised on the topic of European industry and economy, organising the material according to a thematic structure, which is designed to give continuity and coherence to the argument. The question of theory and method is addressed at the outset, followed by applied analysis with respect to the problems facing industry in the European economy and in the global economy generally. The opening chapters therefore formulate the theoretical and conceptual apparatus that is applied throughout the rest of the thesis. The argument proceeds to analyse key aspects of European industry in the context of an increasingly globalised environment. Having discussed problems and prospects, the thesis draws some conclusions and identifies the key elements of a solution.