In the last year, competitiveness has moved up the ladder of EU priorities in European politics and no one can ignore its importance for the EU’s future.
Competitiveness was a key theme of the Commission President Ursula von der Leyen’s annual State of the Union speech to the European Parliament in September last year. Von der Leyen pledged to do what is necessary to defend Europe’s competitive advantage.
European companies are struggling to recruit skilled labour, regulation of key sectors is stricter than in the other competing countries, namely the United States and China, investment in research and development is lower, and physical and digital infrastructure inhibits trade and economic growth. These challenges are well known and have been documented in multiple studies.
Von der Leyen has also tasked Mario Draghi, former head of the European Central Bank, to make concrete proposals on how EU competitiveness can be improved. This is welcome. However, good suggestions will not be enough, there must also be the political will and ability to implement them.
The EU has set itself the goal to strengthen its resilience and influence in the world, but is losing the competitiveness needed to achieve this goal. The EU’s share of the world economy is predicted to steadily decrease from nearly 15% to only 9% by 2050.
Therefore, it is imperative to improve the EU’s productivity and competitiveness. To that end, the EU must adopt a competitiveness agenda, which, in line with the principles of the single market and the social market economy, is forward-looking, well-defined and coordinated, and promotes the prosperity of businesses and workers, improving their ability to innovate, invest and trade and compete in the global marketplace for the common good and drive our transition to climate neutrality. This is essential not only to ensure future prosperity, innovation, investment, trade and growth, but also to create quality jobs and raise living standards.
This is why EU companies have clear expectations from this new momentum and demand to re-position competitiveness within a broader economic and societal long-term framework.
The EESC has been working on identifying the factors and actors that influence long-term competitiveness and productivity and which must be considered in an integrated vision. We have worked on the competitiveness ecosystems with the ambition to explain to the Commission which indicators they should further enhance or complement.
Thus, a country-based approach in assessing the issues and how to solve them seems to be a crucial angle which the Commission has not dealt with sufficiently throughout its two communications on long-term competitiveness.
More generally, the Commission has drawn up a list of 17 performance factors to be assessed annually on the 9 dimensions of competitiveness it identifies. But it is also necessary for the Member States to fully respect them and for the Commission to have the proper enforcement means to oblige them to do so. That’s what we're asking for.
On the indicators, the following top the list:
- Access to finance, at a reasonable cost but without penalising future generations.
- On public services and critical infrastructure, we need to invest and better measure these investments. We propose six evaluation parameters in this respect.
- On research and innovation: increasing cooperation, whether public/private, regional or global, is vital.
- On data networks and energy, security, price and climate neutrality are the key words.
- In terms of circularity, the role of the EU doesn’t need to be demonstrated anymore, but we need to pay attention to balance competition between operators.
- The EU’s legislative framework on digitalisation is a precursor: connectivity, AI, data, etc. In this framework, we must take up the challenge to balance the human aspects with the promises of digital technology.
- Education and training must be able to respond to demographic and sociological challenges.
- And finally, in terms of strategic autonomy and trade, our dependencies are our weaknesses. Businesses need to reorganise themselves and the EU needs to provide an enabling framework to meet this challenge.
Finally, on the single market, we firmly reiterate the need for Member States to follow the rules of the acquis communautaire and the principles of the Treaties. No more barriers and real control. The political will of EU governments to implement what they negotiate in Brussels and the capacity of the Commission to work in interdepartmental services and not in silos, which contributes to more inconsistencies. That’s what we need.
We will never say it enough.
And in this context, let us rely on Brussels for the results of the competitiveness checks and use regional industrial clusters at the national level. Tools exist, let’s use them.
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