Competitiveness

Overview

Europe has always been a continent of industry, enterprise and innovation – reinventing itself through industrial and tech revolutions, global competition and changing societies.

We emerged stronger from the shock of lockdowns and overcame an unprecedented energy crisis, achieving this together with resilience and determination. However, our competitiveness now needs a major boost. The global economy is changing rapidly.

To safeguard and boost Europe’s competitiveness, also vis-à-vis other global actors, prosperity, and fairness, we must take decisive action. This starts with making business easier and faster, and deepening our single market across all sectors. The competitiveness compass, as the first major initiative of the new Commission, will frame our future work building on the Draghi report.

Key figures

49.3% share of renewables in electricity generation in the third quarter of 2025

up to €4 billion for investment in AI research and deployment for the period 2024-2027

76.2% of people aged 20 to 64 years had a job in the first quarter of 2025, a record high

_^Sources:_^Eurostat_^,_{^{DG CNECT}}_^,_^Eurostat

Objectives

Making business easier
to foster economic growth
A Clean Industrial Deal
to support EU’s competitive industries and create quality jobs
A more circular and resilient economy
to transition to more sustainable production and consumption practices
Boosting productivity with digital tech diffusion
to strengthen EU's competitiveness and become a leader in AI innovation
Putting research and innovation
at the heart of our economy
Turbo charging investment
to accelerate green, digital and social transition
Tackling the skills and labour gaps
to improve people’s careers and economic competitiveness

How we will achieve our objectives

Over the next few years, to ensure Europe’s competitiveness and prosperity, we will

Make business easier and faster

To enhance our competitiveness, we will

introduce a competitiveness compass to close the innovation gap, decarbonise and increase security
complete the single market in key sectors to allow companies to scale up
implement a new approach to competition policy
reduce administrative burden and reduce reporting obligations by at least 25% and at least 35% for SMEs
stress-test the EU acquis and make proposals to simplify and codify legislation to eliminate overlaps and contradictions, while maintaining high standards
propose a new EU-wide legal status to help innovative companies grow
have a new SME and competitiveness check to help avoid unnecessary administrative burden
propose to renew the Interinstitutional agreement on simplification and better law-making

Build a new Clean Industrial Deal

To stay the course on the goals set out in the European Green Deal, decarbonise our economy and bring down energy prices, we will

present a Clean Industrial Deal to make our industry competitive and create quality jobs
propose to set out a 90% emission-reduction target for 2040in the European Climate Law
support industries and companies through the transition by launching an industrial decarbonisation accelerator act, helping to speed up related planning, tendering and permitting
reduce energy costs for households and businesses by completing the energy union
invest in clean energy infrastructure and technologies
activate and extend our aggregate demand mechanism to go beyond gas and include hydrogen and critical raw materials
secure supplies of raw materials, clean energy and clean tech with the development of clean trade and investment partnerships
continue to be a leader in international climate negotiations
encourage rail travel and propose a single digital booking and ticketing regulation, to ensure that Europeans can buy one single ticket on one single platform and get passengers’ rights for their whole trip

Work towards a more circular and resilient economy

To shift to a more sustainable pattern of production and consumption, retaining the value of resources in our economy for longer, we will

help to create market demand for secondary materials and a single market for waste through a new circular economy act
put forward a new chemicals industry package, providing clarity on ‘forever chemicals’, or PFAS
work to complete the European health union, diversifying supply chains, fostering access to most advanced treatments, making the health and pharmaceutical sector more resilient
work on reducing dependencies on critical medicines and ingredients by putting forward a critical medicines act
step up our work on preventive health, in particular for mental health, cardiovascular diseases, cancer, as well on treatments for degenerative illnesses and research on autism
safeguard the security of our healthcare systems by proposing a European action plan on the cybersecurity of hospitals and healthcare providers

Boost productivity with digital tech diffusion

To increase productivity through diffusion of digital technologies, we will

encourage investments in digital infrastructures to improve access to secure, fast and reliable connectivity
continue to step up our enforcement of the EU digital laws
tackle challenges with e-commerce platforms
step up investment in supercomputing, semiconductors, the Internet of Things, genomics, quantum computing, and space tech
ensure access to supercomputing capacity for AI startups and industry via an AI continent action plan
boost new industrial uses of AI and improve public services with an apply AI strategy
pool all our resources through the Resource for AI Science in Europe (RAISE)
ensure seamless and at-scale data sharing with a European data union strategy

Open Doors Day at the European Institutions

Put research and innovation at the heart of our economy

To enhance Europe’s competitiveness and drive it towards a new age of invention and ingenuity, we will place research, innovation, science and technology at the centre of our economy. We will

increase research spending to focus more on strategic priorities
expand the European Research Council and the European Innovation Council
make it easier and faster to bring biotech from the laboratory to the market with a European biotech act
support green and digital transitions and develop high-value technologies through a strategy for European life sciences
enhance collaboration between research departments, higher education and business by strengthening university alliances

Turbo charge investment

We will invest massively in our sustainable competitiveness, by using public investment to leverage and de-risk private capital. We will

put forward risk-absorbing measures to make it easier for commercial banks, investors and venture capital to finance fast-growing companies
review our rules to address barriers that restrict the amount of European capital available to finance innovation
leverage private savings to invest in innovation and the clean and digital transitions with the establishment of a European savings and investments union
revise public procurement rules to enable preference to be given to European products for certain strategic sectors
develop strategic technologies and manufacture them in Europe by establishing a European competitiveness fund that will also support Important Projects of Common Interest

Tackle the skills and labour gaps

To improve people’s careers and our competitiveness, we will

establish a union of skills which will focus on investment, lifelong learning and skill retention
work to improve basic skills
propose a STEM education strategic plan to address decline in performance, the lack of qualified teachers in areas linked to science, technology, engineering and maths (STEM) and bring more girls into STEM education and careers
promote vocational education and training (VET) with a European strategy for VET
boost and refocus skills funding in the EU budget
ensure cross-country skill recognition by putting forward a skills portability initiative and continue to work towards a European degree

Progress to date

Monitor, follow, and stay updated on the progress of new initiatives, proposed laws and legislative changes under this priority

September 2026
An European innovation act to help Europe's most innovative ideas be developed, financed and scaled up
July 2026
An electrification action plan to make Europe the world's first "electro-powered" continent
A new plan to address the risks and harness the opportunities of advanced artificial intelligence in cybersecurity
June 2026
A tax simplification package to simplify EU tax rules and reduce compliance burdens for businesses
The European technological sovereignty package, a set of new measures to strengthen Europe’s digital autonomy and resilience
May 2026
New initiative to simplify EU-wide train booking and travel
March 2026
EU Inc., a new corporate framework simplifying the launch, operation and growth of businesses across the EU
An Industrial Accelerator Act to strengthen industry and create jobs

Follow the implementation of the priority

In the spotlight

Europe’s path to becoming the world’s first electro-powered continent

The new electrification action plan aims to accelerate Europe’s shift from fossil fuels to electricity across industry, transport and buildings. Its goal is to make Europe the world’s first “electro-powered” continent by increasing the share of electricity in final energy consumption from 23% today to 46% by 2040. Achieving this target could save the EU an estimated €260 billion a year in fossil fuel imports.

The new plan will modernise and decarbonise Europe’s energy system, which will help accelerate the green transition. It will help reduce the price gap between electricity and fossil energy costs by incentivising the uptake of cleaner, electricity-based technologies such as heat pumps, electric vehicles and batteries, among others.