Competitiveness

A competitive economy is an economy whose sustained rate of productivity is able to drive growth and, consequently, income and welfare. Economic competitiveness has long been one of the key political priorities of the European Union (EU).

To recover from the COVID-19 pandemic, the EU has adopted NextGenerationEU – a €1.8 trillion (in 2018 prices) post-pandemic recovery plan, designed to build a greener, more digital and more resilient Europe – and its Recovery and Resilience Facility.

In this context, the EU has accelerated its transition towards climate neutrality and digital leadership, transforming the economy, society and industry and requiring new technologies, investment and innovation to ensure the EU remains competitive, while allowing EU economies and societies to grow and to reduce poverty and inequality. In other words, to create an economy that works for people. This involves, among other things, a shift from linear production to a circular economy for products, services, markets and business models.

Two of the European Commission’s priorities that are of particular relevance to the EU’s competitiveness are:

the European Green Deal and
a Europe fit for the digital age.

The European Green Deal focuses on creating a resource-efficient and competitive economy. The communication was followed up by the climate law, and other measures, to make the EU’s climate, energy, transport and taxation policies fit to reduce net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

The EU’s digital transformation is mainly based on:

the digital strategy (2020), for a fair and competitive digital economy;
the 2030 digital compass (2021), designed to enable people and businesses to create a human-centred, sustainable and prosperous digital future;
the proposed path to the digital decade (2021), addressing the gaps in digital capacities, focusing on digital skills, digital infrastructure, digital business and digital public services.

The new industrial strategy for Europe, as updated in 2021, offers new measures to accelerate the green and digital transitions, and also responds to calls to identify and monitor the main indicators of economic competitiveness:

internal market integration
productivity growth
international competitiveness
public and private investment and
research and development investment.

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Competitiveness