The future of European competitiveness, innovation, and decarbonization as keys to growth

Mario Draghi’s latest report, titled “The Future of European Competitiveness,” commissioned by European Commission President Ursula von der Leyen, sends a clear message: Europe must adapt to become more competitive and productive while preserving its industrial fabric, which will enable it to finance its social model. Although there is no imminent risk, the report warns that without a radical change to improve productivity and growth, Europe could see its ambitions diminish and lose ground in technological leadership, climate responsibility, and global autonomy. Currently, the competitiveness gap with the United States and China is widening; the EU’s GDP has gone from being 15% lower than that of the US in 2002 to 30% lower in 2023, largely due to slow technological adoption. A clear example is that only four of the world’s top 50 technology companies are European, and Europe’s share of global technology revenue has fallen from 22% to 18% over the past decade. To reverse this trend, Draghi presents solutions centered on three pillars: innovation, decarbonization, and security—the latter seen as an essential requirement for sustainable growth. Among his 170 proposals, the need to complete the European single market, harmonize industrial policies, and create a more agile decision-making system stands out. Particularly important is the challenge of balancing ambitious decarbonization goals with the need to maintain industrial competitiveness. In this context, decarbonization is a unique opportunity for Europe, but it must be supported by a coherent plan that includes reducing and stabilizing energy prices, increasing generation capacity and investment in infrastructure, and accelerating authorization processes for green technologies. This is where companies like Edison Next play a fundamental role as an energy partner. With a proven track record in the energy transition, Edison Next supports industries in implementing sustainable solutions such as renewable energy, energy management systems, and the adoption of clean technologies like hydrogen. This type of collaboration is key for Europe to maintain its leadership in renewable energy in an environment where competition, especially from China, is increasingly backed by state subsidies. The report also highlights that decoupling renewable energy prices from fossil fuels is crucial to reducing volatility and ensuring sustainable growth. Instruments such as Power Purchase Agreements (PPAs) and Contracts for Difference (CfDs) are emerging as strategic tools in this process. However, for these initiatives to thrive, greater support is needed—something in which Edison Next can also offer innovative solutions, helping companies navigate these complex markets and support their decarbonization efforts. The path to a more competitive Europe also runs through strategic sectors such as heavy industry. Decarbonizing industries like chemicals, basic metals, non-metallic minerals, and paper will require an investment of €500 billion over the next 15 years. Here, the circular economy presents a major opportunity, allowing these industries to reduce energy consumption and carbon emissions, especially in sectors like aluminum, iron, and steel, where recycling is much more efficient than production from virgin raw materials. Edison Next, as a key partner in the energy transition, can help maximize the value of the circular economy by supporting industries in implementing strategies that reduce dependence on imported raw materials and promote local recycling. As Draghi’s report mentions, Europe could meet up to 75% of its metal needs for clean technologies through recycling by 2050, provided a single market for waste and the circular economy is created. In summary, the report concludes that to combine competitiveness and decarbonization, Europe must improve coordination between energy, industrial, and climate policies, facilitate access to competitive and clean energy, and reduce bureaucracy. Edison Next is committed to supporting European companies in this process, offering advanced energy solutions that facilitate a successful green transition and position Europe as a global leader in sustainability and competitiveness.