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A Competitiveness Strategy for Europe Today, the European Commission has published its report on "The Future of European Competitiveness" (link below), marking a decisive moment for the EU's economic strategy. Led by Mario Draghi, the report outlines the structural shifts Europe must undertake to drive growth, enhance innovation, and strengthen its global positioning in an increasingly competitive landscape. Also today, The Economist published an insightful article that highlights the key takeaways from the EU report (link below). According to the article, Draghi emphasizes the urgent need for Europe to close its innovation gap with the U.S., particularly in the tech sector, which has been a major driver of productivity. The article also highlights the massive investment required for the EU to meet its goals of decarbonisation and digitalisation, with Draghi comparing this effort to a Marshall Plan-scale initiative. Lastly, The Economist underscores the importance of enhancing Europe’s security by reducing dependencies on critical resources and strengthening its industrial capacity, especially in defence. I hope you find it an interesting read! https://lnkd.in/dYCVK3ge

With "Forging a competitive path: Europe beyond 2030," we conclude the series of posts we began in June under the tittle of "EU 2024-2029: Boosting Competitiveness". This final publication outlines our vision of Europe beyond 2030, provided that an effective competitiveness strategy is implemented across the four pillars set out in our new position paper "EU 2024-2029: Driving Competitiveness. Digital by Innovation, Green by Design".  We envision a more competitive and resilient Europe, prepared to tackle global challenges, with strengthened leadership in digital innovation and sustainability, and a focus on the well-being of its citizens. However, the success of this vision will depend on European companies and also policymakers' ability to deliver a EU Competitiveness Deal in the 2024-2029 European cycle. #EU20242029 #EUCompetitivenessDeal

The downfall of European competitiveness. An excellent report by Draghi that exposes the challenges that our economy faces and the difficult way forward. 🔴 5 factors that threat our wealth and well-being: 1️⃣ Productivity Gap: European productivity growth lags behind the US, especially in tech.  2️⃣ Demographic Decline: Europe's workforce is shrinking, making it harder to sustain growth and fund social programs. 3️⃣ Global Paradigm Shift: The era of rapid global trade growth is waning, and geopolitical stability is deteriorating. Russia's invasion of Ukraine has exposed Europe's energy vulnerabilities. 4️⃣ Technological Lag: Europe has missed out on the digital revolution and is weak in emerging technologies. ❌🦄 For example, close to 30% of the “unicorns” founded in the last 20 years in Europe relocated their headquarters abroad, with the vast majority moving to the US. 5️⃣ Fragmentation: Europe's fragmented markets and slow decision-making processes hinder our ability to develop agile strategies in the fast-changing global market. 🟢 3 solutions outlined in the report: 1️⃣ Innovation Focus: Europe needs to prioritize innovation and technology development to close the gap with the US and China. This includes increasing R&D investment, fostering entrepreneurship, and streamlining regulations. 2️⃣ Decarbonization and Competitiveness: Europe should align its decarbonization efforts with economic competitiveness. This involves reforming energy markets, investing in clean technologies, and addressing global competition, particularly from China. 3️⃣ Security and Dependency Reduction: Europe must strengthen its security posture and reduce its reliance on critical imports. This includes building a stronger defense industry, securing supply chains, and developing a more assertive foreign economic policy. How do you see the future of Europe?

The two reports released this week on the future of European competitiveness paint a picture of a continent facing serious challenges. Productivity growth lags behind global competitors, particularly in the tech sector. While Europe has historically excelled in areas like manufacturing, it is now under pressure due to a widening gap in digital innovation. The energy crisis, amplified by geopolitical tensions, places European industries at a further disadvantage with persistently high energy costs. The reports highlight a need for strategic autonomy, reducing dependencies on external powers for critical resources and fostering resilience within European industries. Europe's commitment to decarbonisation is seen as an opportunity for leadership, yet the costs of transitioning to a low-carbon economy risk deepening inequalities within the EU. Closing the innovation gap and addressing fragmented industrial policy responses are essential if Europe is to maintain its competitive standing in a rapidly evolving global landscape. However, the real question is whether Europe can transform these challenges into an opportunity for true leadership. The historical trajectory of great powers teaches us that failure to adapt to shifting geopolitical and technological realities leads to stagnation. Europe has an unparalleled opportunity to redefine competitiveness through resilience, adaptability, and integration into the broader ecological and social systems. Competitiveness must encompass Europe’s ability to operate within planetary boundaries, to innovate sustainably, and to foster an inclusive, human-centred approach to growth. The current focus on technological leadership and energy transition is important, but the deeper, unseen drivers lie in how Europe integrates its rich cultural diversity and philosophical traditions into these efforts. Europe’s strength has always been in its ability to balance competing interests—social equity, environmental stewardship, and economic growth. The psychological drivers of risk aversion and nostalgia must be addressed through leadership that reframes these challenges as pathways to future prosperity, not threats to current stability. To lead the world in sustainability, Europe must recognise the ethical dimensions of its economic choices. The transition to green technologies, for example, should be grounded in a just transition, ensuring that workers and industries are supported, and that Europe’s global footprint, from supply chains to energy consumption, does not perpetuate inequality or environmental degradation elsewhere. The future of European competitiveness depends on its ability to turn these challenges into systems-based opportunities, where economic success is intertwined with social responsibility and environmental health. To access the reports: https://lnkd.in/duJyMyaD

Earlier this week, the much-anticipated report on the way forward for Europe’s ailing competitiveness, authored by Mario Draghi, finally came out. Expectations for what’s next are high, but above all the report should be seen as a – last? – wakeup call for Europe to do better and stop thinking everything can be solved with more of the same: more regulation, more self doubt, more protectionism. It’s high time the EU actually starts to listen to what industry and employers, innovators and market leaders need to succeed in the EU. https://lnkd.in/ejJabyJA

"If Europe cannot become more productive, we will be forced to choose. We will not be able to become, at once, a leader in new technologies, a beacon of climate responsibility and an independent player on the world stage. We will not be able to finance our social model. We will have to scale back some, if not all, of our ambitions. This is an existential challenge." Europe faces a widening productivity gap compared to the US and China. Let's have a look at some key takeaways from the latest report of the future of European competitiveness by Mario Draghi. - Innovation and Productivity: The EU lags in advanced technology and commercial innovation. We need to refocus on emerging technologies like AI and quantum computing, streamline regulations, and improve funding access for startups. - Energy and Decarbonisation: High energy costs and competition from China in clean tech are major issues. A comprehensive strategy to reduce energy prices and improve competitiveness in clean technologies is essential. - Geopolitical Security and Dependencies: Europe is vulnerable due to reliance on external suppliers for critical materials and technologies. Strengthening defense capacity, stockpiling resources, and developing a cohesive foreign economic policy are crucial. - Governance and Coordination: Slow and fragmented decision-making hinders progress. Streamlining EU governance and improving coordination between national and EU policies can drive long-term growth. We truly find ourselves between a rock and a hard place and the threat is indeed existential. Addressing these challenges requires collective action, industrial policy reforms, and strategic investments across energy, technology, and defense sectors. What are your main concerns about the outlook the report describes? #Innovation #Competitiveness #EU

The future of European competitiveness Three actions to reignite growth: 1. First – and most importantly – Europe must profoundly refocus its collective efforts on closing the innovation gap with the US and China, especially in advanced technologies. 2. The second area for action is a joint plan for decarbonisation and competitiveness. 3. The third area for action is increasing security and reducing dependencies. What is standing in the way? 1. First, Europe is lacking focus. We articulate common objectives, but we do not back them by setting clear priorities or following up with joined-up policy actions. 2. Second, Europe is wasting its common resources. We have large collective spending power, but we dilute it across multiple different national and EU instruments. 3. Third, Europe does not coordinate where it matters. The objective of this report is to lay out a new industrial strategy for Europe to overcome these barriers. Link to the report: https://lnkd.in/efgEin_2 #eugreendeal #europeancommission #innovation #energytransition #strategy #industry #industrytransformation #focus #competitiveness #decarbonisation #policymaking #europe #energyprices #DraghiReport #resilience

📈 **COMPETITIVENESS: France and Germany Support a Common Approach** 📈 French and German Economy Ministers Bruno Le Maire and Robert Habeck released a joint contribution on European competitiveness on May 23. 🇫🇷🇩🇪 They hope this document will inspire the European Commission's strategic agenda for the next five years. 🔹 **Key Focus Areas:** 1. **Reducing Regulatory Burdens** on businesses. 2. **Necessary Private and Public Investments**. 3. **Strengthening the Internal Market**. 4. **Adjusted Trade Policy**. 🔹 **Driving Role of the 'Green Deal'** for Growth 🌱: - Increase European funding to support European public goods and infrastructure for green and digital transitions. - Proposal for a **European Digital Pact** to accelerate digitization and capitalize on opportunities in innovative technologies. 💻 🔹 **International Trade**: - Revising the European approach to include geostrategic interests and sustainable development. 🌍 - Focus on **strategic sectoral agreements** with global partners. #Competitiveness #Europe #GreenDeal #DigitalTransition #InternationalTrade #France #Germany

The European Union (EU) is taking significant steps to strengthen its competitiveness on a global scale. As global markets evolve, the EU is focusing on leveraging innovation, sustainability, and digital transformation to remain a leader in key industries like manufacturing, aerospace, and technology. The Need for Competitiveness : The push for enhanced competitiveness comes in response to rapid technological advancements and rising competition from emerging economies, particularly China. The EU aims to boost its industrial capabilities by integrating green technologies, digital transformation, and innovation into its economic strategies. Post-pandemic recovery has also highlighted the need to accelerate growth through sustainable practices and advanced technologies. Key Implementation Areas : 1/ Investment in Research & Innovation One of the cornerstones of the EU’s strategy is investment in R&D through programs like Horizon Europe. This initiative supports breakthroughs in AI, quantum computing, and green technologies, enabling Europe to stay ahead in innovation and industrial transformation. 2/ Digital Transformation Digitalization is crucial for modernizing EU industries. The focus is on scaling up AI, 5G infrastructure, and cybersecurity capabilities to empower businesses and SMEs. Advanced technologies will help optimize production processes and improve market agility. 3/ Green Transitions The European Green Deal aims to make Europe the first climate-neutral continent by 2050. This transition focuses on adopting low-carbon technologies and creating a circular economy, promoting sustainable growth across industries like automotive, energy, and manufacturing. 4/ Supporting SMEs Recognizing the critical role of SMEs in driving the EU economy, the strategy offers support through better access to finance and opportunities to participate in digital and green transitions. By enhancing SME capabilities, the EU seeks to foster a more resilient economy. Future Outlook: The EU’s competitiveness strategy aims to secure the future of its industries by combining green growth with digital innovation. This ensures that Europe remains a global leader while addressing key challenges such as climate change, resource scarcity, and digital disruption. Looking ahead, integrating technologies like AI, digital twins, and digital threads will enhance innovation in sectors like aerospace and automotive. Sustainable development and technological leadership will be crucial in shaping Europe's industrial and economic landscape. Conclusion: The EU is poised to lead in creating a sustainable, innovative, and competitive economy. By advancing green technologies and fostering digital transformation, the EU can tackle emerging global challenges and ensure a prosperous future for its industries. PS: Link to details is in comments. #EUCompetitiveness #Innovation #GreenDeal #DigitalTransformation #Aerospace #Automotive #Sustainability #FutureOfIndustry #PLM #DigitalTwin

Mario Draghi's report on the competitiveness of the EU is rather chilling: "Across different metrics, a wide gap in GDP has opened up between the EU and the US, driven mainly by a more pronounced slowdown in productivity growth in Europe. Europe’s households have paid the price in foregone living standards. On a per capita basis, real disposable income has grown almost twice as much in the US as in the EU since 2000." "First – and most importantly – Europe must profoundly refocus its collective efforts on closing the innovation gap with the US and China, especially in advanced technologies. Europe is stuck in a static industrial structure with few new companies rising up to disrupt existing industries or develop new growth engines. In fact, there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period. This lack of dynamism is self-fulfilling." At NP-Hard Ventures we're long on Europe but there's a lot of work to be done to counter the slowdown in productivity, growth and lack of dynamism. To that end, we're excited to announce our newest installment of our Foundry Meetups; The Re-industrialize Europe Edition, featuring Farmless, Cradle and Monumental who are leading the charge to reignite Europe’s industrial dynamism. Sign-up link in the comment below. Looking forward to seeing you there. 🤖 🇪🇺