Today, the European Commission introduced the Competitiveness Compass, a strategic initiative aimed at revitalizing Europe’s economic strength by providing a clear framework to guide the Commission’s efforts in enhancing the continent’s global competitiveness. The Compass outlines a roadmap for Europe to become the leader in developing future technologies, services, and clean products while striving to be the first continent to achieve climate neutrality.
Over the past two decades, Europe has faced challenges in keeping up with major global economies, primarily due to a persistent gap in productivity growth. However, with its talented workforce, strong capital base, Single Market, and social infrastructure, the EU has the resources to reverse this trend—provided urgent action is taken to overcome structural barriers and weaknesses that hinder progress.
President of the European Commission, Ursula von der Leyen, emphasized the importance of addressing Europe’s weaknesses: “Europe has everything it needs to succeed in the race to the top. But, at the same time, we must fix our weaknesses to regain competitiveness. The Competitiveness Compass transforms the excellent recommendations of the Draghi report into a roadmap. We now have a plan, political will, and what matters most is speed and unity.”
The Compass identifies three core areas of action to drive transformation:
- Innovation: Europe must reinvigorate its innovation ecosystem, fostering an environment for startups and promoting industrial leadership in emerging sectors such as AI, quantum, biotech, and robotics. New initiatives like the ‘AI Gigafactories’ and ‘Apply AI’ projects will encourage the development and industrial adoption of AI, while a dedicated EU Start-up and Scale-up Strategy aims to tackle barriers faced by new businesses.
- Decarbonisation: To combat high energy prices, the Compass proposes a Clean Industrial Deal and Affordable Energy Action Plan to make the EU an attractive hub for clean tech industries while supporting decarbonisation efforts across energy-intensive sectors like steel, chemicals, and metals.
- Security: Reducing dependencies and increasing security in global supply chains is essential. The Compass outlines the creation of Clean Trade and Investment Partnerships to secure access to raw materials, clean energy, and sustainable transport fuels, and emphasizes the importance of reviewing EU public procurement rules to prioritize critical sectors.
The Compass also lays out five horizontal enablers critical to competitiveness across all sectors:
- Simplification of regulatory processes and reduction of administrative burdens for businesses.
- Lowering barriers within the Single Market to enhance the flow of goods, services, and investments.
- Financing competitiveness by developing a European Savings and Investments Union to facilitate access to capital.
- Promoting skills and quality jobs to ensure a strong workforce aligned with future industry needs.
- Better coordination of policies at both EU and national levels to support the implementation of shared objectives.
The Competitiveness Compass builds upon the Draghi Report, which was commissioned by President von der Leyen and presented concrete recommendations for strengthening Europe’s competitiveness. As the EU prepares to implement these measures, the Competitiveness Fund will replace existing financial instruments, streamlining funding to support the execution of the Compass’s strategic goals.
By addressing these core areas and enablers, the EU aims to accelerate its path towards greater competitiveness, innovation, and climate neutrality, positioning itself as a global leader in sustainable economic growth.
Find out more here. |