The Draghi report set out what it would take for Europe to close the gap. Below are our recommendations, and the report's main pillars tracked against the data. Follow the promises on the accountability tracker.
Editorial analysis connecting Europe's competitiveness challenges with practical policy solutions.
Europe is not short of capital. Across the continent, households save large parts of their income, pension funds manage vast pools of long-term wealth, and institutional investors control resources that should be capable of financing a new generation of European companies. Yet when those companies begin to grow, many still struggle to find the capital they need at home.
Tax and regulatory frameworks that let EU pension funds allocate a small, prudent share to European venture and growth capital, to help close the structural funding gap with the US.
Adopt the regulatory playbook of the digital frontrunners, from digital-first procurement to SME-friendly data rules, to lift the digital economy across all member states.
A faster approval path for strategic technologies such as AI, clean tech and biotech, to counter China's growing lead in patent volume and shorten Europe's innovation cycles.
Targeted tariffs for data centres and high-tech manufacturing to reduce Europe's energy-cost disadvantage versus the US and China, which is critical for AI and semiconductor competitiveness.
Incentives for scaling companies to stay headquartered in Europe, through stock-option reform, preferential tax treatment and public-procurement access, modelled on Nordic success.
Harmonise venture-capital rules across member states with a single licensing framework, so cross-border capital can flow to European startups without 27 separate rulebooks.
Each of the report's main pillars, linked to the indicator that measures progress.
Source: Draghi Report on EU Competitiveness, September 2024
Europe is caught in a middle-technology trap: strong in mature industries, but weak at the frontier of AI, cloud and semiconductors, where the US and China are pulling ahead.
Refocus public and private research on breakthrough technologies, and help that research scale into globally competitive companies.
Draghi puts the additional investment Europe needs at roughly €750 to €800 billion per year, a scale comparable to the post-war reconstruction effort relative to GDP.
Mobilise public and private capital, including joint EU financing, behind a small number of strategic priorities.
European firms pay far more for electricity and gas than their US competitors, which steadily erodes the competitiveness of energy-intensive industry.
Decouple power prices from gas, accelerate clean generation and invest in the grid so industry can plan on lower, stable costs.
European savings are abundant but fragmented across 27 national capital markets, so scale-ups struggle to raise growth capital at home and often leave to find it.
Integrate Europe's capital markets so companies can fund their growth without relocating.
Overlapping national rules slow companies down and fragment the single market, raising the cost of scaling a business across Europe.
Simplify and harmonise rules, and speed up decision-making so the single market works like one market.
Europe depends on others for critical inputs, from semiconductors to raw materials, leaving its industrial base exposed to shocks and leverage.
Coordinate industrial and trade policy to secure the supply chains that strategic industries depend on.
We track announced reforms against the indicators they should move.
Open the accountability trackerWe would like to measure how the site is used. Analytics cookies tell us which pages and charts people read, nothing more. They are optional, and the site works exactly the same either way. Details in our cookie policy and privacy policy.