Competitiveness in the age of geopolitics: What agenda does the EU really need?

Werner Raza and Julian Maukner

No 81, Working Papers from Austrian Foundation for Development Research (ÖFSE)

Abstract: Competitiveness has returned to the fore of European economic policymaking with a vengeance. In this paper, we scrutinize the recent debate on the need for promoting European competitiveness, as prominently diagnosed by the Draghi Report. By disaggregating the overall academic and policy-oriented debate on competitiveness into three distinct conceptual strands - market share-focused competitiveness, productivity-focused competitiveness, and beyond-GDP competitiveness - we conduct a descriptive statistical analysis of competitiveness indicators for both the European Union and the United States. Though our analysis concurs with the Draghi Report by identifying an innovation gap in high-tech services and with respect to energy, by and large the state of EU competitiveness does not appear as bleak as insinuated by the recent public discourse. Based on a highly selective reading of the Draghi Report, the focus of current EU competitiveness policies on across-the-board deregulation will not only contribute little to address the identified problem areas, but risk to become self-defeating as they tend to exacerbate reliance upon an increasingly outdated export-oriented growth model of the EU, given pervasive protectionist tendencies in the global economy. We conclude that a more targeted approach to tackle both the innovation gap and energy dependencies is needed, which should be based on an expansionary public investment agenda and mission-oriented industrial polices.

Keywords: competitiveness; Draghi-Report; innovation; European Union; geopolitics (search for similar items in EconPapers)
JEL-codes: F6 O3 O4 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:oefsew:336801

DOI: 10.60637/2026-wp81

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