Strengthening European competitiveness

The Competitiveness Compass

In January 2025, the Commission presented the Competitiveness Compass, a new roadmap to restore Europe’s dynamism and boost our economic growth. The Compass builds on the analysis of Mario Draghi’s report on the future of European competitiveness and provides a strategic framework to drive the Commission' work during this mandate. 

The Draghi report originally identified three imperatives for the EU to boost its competitiveness: 

1. Closing the innovation gap 
2. A joint strategy for decarbonisation and competitiveness 
3. Increasing security and reducing excessive dependencies 

The Competitiveness Compass sets out an approach and measures to translate these imperatives into reality. 

Closing the innovation gap

The Compass spells out how the European Union will boost innovation by:

• creating a friendly environment for young companies to start and expand, with a dedicated EU Start-up and Scale-up Strategy
• helping big companies adopt new technologies such as artificial intelligence (AI) and robotics, thanks to an “Apply AI” initiative
• making it easier for companies to operate across the EU by simplifying rules and laws, with a proposal for a 28th legal regime that will guarantee one set of rules across the EU
• supporting the development of new technologies, with action plans for advanced materials, quantum, biotech, robotics and space technologies 

A joint roadmap for decarbonisation and competitiveness

The Compass sets out how we can facilitate access to affordable energy by:

• putting forward the Clean Industrial Deal, to help reduce carbon emissions, especially for energy intensive companies, and facilitate their transition to low carbon technologies  
• presenting tailor-made action plans for energy intensive sectors, such as steel, metals, and chemicals, which are the most vulnerable at this phase of the transition
• developing an Affordable Energy Action Plan to help bring down energy prices and costs 

Reducing dependencies and increasing resilience and security

The EU already has the largest and fastest growing network of trade agreements in the world, covering 76 countries.

The Compass identifies how we can further diversify and strengthen our supply chains by:  

• developing a new range of Clean Trade and Investment Partnerships to help secure supply of raw materials, clean energy, sustainable transport fuels, and clean tech from across the world  
• reviewing the Public Procurement rules to allow for the introduction of a European preference in public procurement for critical sectors and technologies 

Five horizontal enablers for competitiveness 

To complement these three pillars, the Competitiveness Compass introduces five horizontal enablers to increase our competitiveness across all sectors:

1. Simplification
2. Lowering barriers to the Single Market
3. Financing competitiveness
4. Promoting skills and quality jobs
5. Better coordination of policies at EU and national level 

Communication on the Competitiveness Compass

Press release on the Competitiveness Compass

See all planned actions under the Compass

Key achievements

• The EU provides a stable and secure framework for companies developing digital technologies, through measures such as the Data and Data Governance Acts, the Cyber Resilience Act and the AI Act.
• Lowering the price of energy is vital to boosting our competitiveness. EU actions following Russia’s invasion of Ukraine have allowed us to return to pre-war level energy costs. Meanwhile, our investments in clean energy enabled us to produce more electricity from wind than from gas in 2023 for the first time ever. More than one-fifth of the world’s clean technologies are developed in the EU, and Europe is a world leader in the development of wind turbines, electrolysers and low-carbon fuels.
• The EU has the largest and fastest growing network of trade agreements in the world, covering 76 countries. We are the number one trading partner for 72 countries, representing 38% of world GDP. In 2022, the value of EU trade through free trade agreements with global partners surpassed €2 trillion for the first time.
• The Commission has set ambitious targets to reduce reporting requirements by at least 25% for all companies and at least 35% for SMEs, and eventually expand these reductions to all types of administrative burden This is part of an unprecedented EU simplification effort, which aims to encourage business dynamism and attract additional investment to Europe.
• The EU boasts a large pool of skilled workers, strong education and training systems, and a robust welfare state. Today more than 216.5 million people, or over 75% of the population, are employed, more than at any other time in the EU’s history.