🇪🇺 5 key takeaways from the EU's »The future of European competitiveness« report
The EU Commission published a new strategy for competitiveness this September 2024. Mario Draghi, former European Central Bank President, was tasked by the European Commission to create this report and outline his vision.
Here are the key takeaways around accelerating innovation, decarbonizing, and reducing dependencies.
🚀 Innovation and Productivity
The EU must close the innovation gap with the US and China, especially in advanced technologies, to reignite productivity growth.
🔬 EU lags in commercializing research and scaling up innovative companies
💻 Only 4 of the world’s top 50 tech companies are European
🤖 AI adoption is critical for maintaining competitiveness across industries
🎓 Skills gaps and brain drain hinder innovation potential
🌿 Decarbonization and Competitiveness
Europe needs a joint plan for decarbonization and competitiveness to lower energy costs while capturing industrial opportunities in clean tech.
⚡ EU faces electricity prices 2-3 times higher than the US
🔋 China dominates clean tech manufacturing with significant overcapacity
🏭 Energy-intensive industries struggle with high costs and decarbonization targets
🚗 Automotive sector faces challenges in transitioning to electric vehicles
🛡️ Security and Dependencies
The EU must increase security and reduce strategic dependencies on critical raw materials, technologies, and defense capabilities.
🔑 High concentration of critical raw material suppliers, especially China
🖥️ Over 80% reliance on foreign countries for digital products and services
🛰️ Space sector losing ground despite world-class capabilities
🚢 Defense industry suffers from fragmentation and underinvestment
💰 Financing Investments
Massive investments of 4.4-4.7% of GDP annually are needed, requiring mobilization of both private and public finance at scale.
🏦 EU capital markets remain fragmented compared to the US
📊 Household savings not efficiently channeled into productive investments
🇪🇺 EU budget constraints limit support for strategic investments
🔗 Common safe asset issuance could help integrate capital markets
🏛️ Strengthening Governance
EU governance needs reform to enable faster and more coordinated action on key priorities.
🎯 New “Competitiveness Coordination Framework” proposed
🗳️ Extend qualified majority voting to more policy areas
📜 Reduce regulatory burden on companies, especially SMEs
