A new framework to rekindle economic productivity and secure the EU’s competitive edge has been presented by the European Commission. The Competitiveness Compass builds on the recommendations set out in Mario Draghi’s report on the future of European competitiveness. It will steer the EU’s work on competitiveness over the next five years and translate the report’s recommendations into concrete actions for the EU’s future prosperity.
The EU enjoys a strong system of rights and values, a Single Market, top-notch infrastructure and a skilled workforce, but the Compass recognises that more must be done to ensure Europe keeps pace with other major economies in a challenging and increasingly competitive world. While all the time looking to secure the EU’s climate neutrality, it sets a path for Europe to become the place where future technologies and clean products are invented, manufactured, and put on the market.
The Compass identifies 3 core areas of action:
- Innovation – The EU must close the innovation gap by creating an environment where innovative start-ups, effective industrial leadership and the diffusion of technologies across businesses thrive. Concrete initiatives from the Commission include ‘Apply AI’ and ‘AI Gigafactories’ to drive industrial adoption of AI; action plans for advanced materials, quantum, biotech, robotics and space technologies; and an EU Start-up and Scale-up Strategy that will address the obstacles that are preventing new companies from emerging and scaling up.
- Decarbonisation and competitiveness – The EU will help bring down high and volatile energy prices through an Affordable Energy Action Plan. It will set out a competitiveness-driven approach to decarbonisation through its upcoming Clean Industrial Deal, while an Industrial Decarbonisation Accelerator Act will extend accelerated permitting to sectors in transition. It will also launch action plans for energy intensive sectors, such as steel, metals, and chemicals.
- Security and resilience – The EU will reduce dependencies and increase its resilience and security by continuing to build effective trade partnerships with economies around the world. Through a new range of Clean Trade and Investment Partnerships it will help secure a supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world. It will also review public procurement rules to introduce a European preference in public procurement for critical sectors and technologies
Underpinning these actions will be five cross-cutting activities:
- Simplification by drastically reducing the regulatory and administrative burden on firms
- Lowering barriers to the Single Market through its Horizon Single Market Strategy
- Financing competitiveness by establishing a European Savings and Investment Union
- Promoting skills and quality jobs through a Union of Skills
- Better coordination of policies at EU and national level by introducing a Competitiveness Coordination Tool
The Competitiveness Compass is the first major initiative of the Commission in the 2024-2029 mandate.
For more information
Strengthening European competitiveness
Communication – A Competitiveness Compass for the EU
A factsheet on the Competitiveness Compass
Press release: An EU Compass to regain competitiveness and secure sustainable prosperity
