The European Commission's "EU Competitiveness Compass" outlines a strategy to revitalize Europe's economic standing by addressing innovation gaps, promoting a joint path for decarbonization and competitiveness, and reducing strategic dependencies. This communication identifies longstanding structural weaknesses hindering the EU's growth, particularly in productivity and technological advancement compared to global competitors. To counter this, the Compass proposes a new competitiveness model centered on innovation-led productivity, supported by actions across three key pillars and horizontal enablers. These include fostering a thriving innovation ecosystem, ensuring a competitiveness-friendly green transition, and enhancing economic security through diversified partnerships and reduced reliance on vulnerable supply chains. Ultimately, the document serves as a strategic guide for the EU to regain its economic dynamism, safeguard its social model, and assert its global influence in a challenging geopolitical landscape.

#MEGA - Make Europe Great Again

This IMF working paper investigates the causes behind Europe's lagging productivity growth compared to the United States. Through firm-level analysis, the authors identify performance gaps in both leading and young, high-growth European companies. The paper highlights smaller market sizes and limited access to equity financing as key obstacles for larger firms, while skill shortages and insufficient venture capital hinder the development of startups. Ultimately, the study suggests that deeper market integration and national reforms aimed at resource reallocation and human capital enhancement could revitalize Europe's productivity.

A Nature News article reports on a directive from Trump's team ordering significant government layoffs, which is anticipated to negatively impact science due to associated budget cuts. The piece features insights from scientists within US agencies regarding the potential consequences for their staff and funding. An update notes the National Science Foundation later reinstated some probationary employees. The article also references related content concerning the effects of the Trump administration's actions on research, including grant freezes and the experiences of scientists in environmental agencies.

#MEGA - Make Europe Great Again

Sorry for the missing episode: I've been busy with consulting assignments! We're back:

The first document is the European Commission's 2025 Annual Single Market and Competitiveness Report, assessing the EU's economic competitiveness. It highlights weaknesses like high energy prices, lagging productivity, and insufficient innovation, alongside strengths such as a large single market. The report uses key performance indicators to track progress and proposes solutions. The second document is a staff working paper accompanying the report, focusing on the European Monitor of Industrial Ecosystems (EMI). The EMI examines the green and digital transitions across twelve industrial ecosystems, analyzing industry efforts, framework conditions, and impacts on the environment and productivity. Both sources aim to inform policy and improve the EU’s economic performance.

Germany and France jointly propose a new EU agenda to boost competitiveness and growth over the next five years. Key priorities include strengthening the Green Deal and its Industrial Plan, reducing bureaucratic burdens, and fostering innovation. The plan addresses competitiveness challenges, including strategic dependencies and structural weaknesses, by promoting investments in green and digital technologies, improving the Single Market, and enhancing the EU's trade policy. Significant investment in both public and private sectors is proposed to achieve these ambitious goals.

MEGA - Make Europe Great Again

This European Commission communication addresses the EU's long-term competitiveness beyond 2030. It examines current challenges, including weaker productivity growth compared to other major economies and increasing reliance on global supply chains. The communication proposes nine key drivers to enhance competitiveness, focusing on strengthening the single market, boosting investment, improving infrastructure, fostering innovation, ensuring affordable energy, promoting a circular economy, driving digitalization, developing skills, and strengthening trade. The document also emphasizes the need for a growth-enhancing regulatory framework and utilizes key performance indicators to monitor progress across these areas. Finally, it calls for joint action from businesses and policymakers to secure the EU's future economic prosperity.

Today we analyze a recent Elcano Royal Institute report that analyzes the widening competitiveness gap between the EU and the US. Using nine key performance indicators from the European Commission and additional metrics. The authors assess EU performance in areas such as the single market, access to capital, public investment, R&D, energy, digitalization, and education. The analysis reveals significant EU weaknesses, particularly in digitalization and R&D spending, while highlighting relative strengths in renewable energy and trade surpluses. The report also examines factors like productivity, regulatory burdens, and company size contributing to the disparity. Finally, it concludes with observations on the need for improved EU policies and a more efficient public sector to bridge the gap.

This McKinsey Global Institute article assesses Europe's competitiveness in a new geo-economic era. While Europe excels in sustainability and inclusion, its economic growth lags behind the United States, creating a significant prosperity gap. The authors identify seven key areas impacting competitiveness—innovation, energy, capital, supply chains, talent, size, and competition—and propose ambitious, albeit challenging, goals to address these weaknesses. These goals necessitate higher investment, strategic policy changes, and collaboration between businesses and policymakers. The ultimate aim is to boost Europe's economic performance while maintaining its commitment to sustainability and inclusion.