COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS “The 2024 Annual Single Market and Competitiveness Report”
Date: 2024-02-14
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: competitiveness, digital transformation, economic growth, free movement of capital, green economy, innovation, investment, research and development, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.2.2024  COM(2024) 77 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS “The 2024 Annual Single Market and Competitiveness Report” {SWD(2024) 77 final} - {SWD(2024) 78 final}  
 
 
Introduction 

The EU’s Single Market, one of the world’s largest integrated market areas, is at the core of our 
competitiveness.  With  more  than  440  million  consumers  and  large  economies  of  scale,  it  has 
made  it  possible  for  the  EU  to  become  the  world’s  largest  trading  bloc  –  with  its  businesses 
accounting for one fourth of global exports in services and one fifth in high-tech goods1 – and a 
desirable  destination  for  foreign  investment.  Its  stable  macroeconomic  framework  and  high-
quality infrastructure support an investment-friendly business environment and are rooted in and 
support a strong social market economy model.  

The succession of recent crises has highlighted the importance of strengthening the resilience of 
the Single Market.  The Commission has taken major  initiatives  to  preserve the integrity of the 
Single Market and strengthen the EU’s industrial base during the COVID-19 pandemic as well as 
following Russia’s war of aggression against Ukraine. In this challenging context and in light of 
growing  global  competition,  the  Commission  strives  to  combine  the  twin  green  and  digital 
transition  with  a  competitive  and  sustainable  Single  Market,  leaving  no  one  behind.  A  well- 
functioning  Single  Market  benefits  consumers  through  lower  prices,  diversified  choices  and 
common well-protected rights. 

The  EU  has  very  strong  assets  to  build  on:  highly  qualified  engineers,  excellence  in  research, 
quality infrastructure, a solid manufacturing base, a strong services sector, a competitive edge in 
the  development  of  clean 
technologies,  high-performance  computers,  quantum,  and 
transformative digital technologies – and, of course, the Single Market as a springboard.  

Nonetheless,  the  European  economy  faces  challenges  –  both  long-standing  and  more  recent  – 
related  to  climate  change,  geopolitical  shifts,  technological  acceleration,  high  energy  prices, 
demography,  labour  and  skills  shortages,  strategic  dependencies,  and  unfair  international 
competition.  

In  2023,  the  Single  Market  at  30  Communication2  discussed  the  way  forward  on  how  the 
Single  Market  could  be  further  deepened  to  harness  its  full  potential.  In  parallel,  the 
Communication  on  Long-term  competitiveness3  provided  an  overview  of  competitiveness 
challenges  and  assessed  them  through  the  lens  of  nine  competitiveness  drivers  (see  Figure  1). 
This  Communication  provides  an  analysis  of  the  Single  Market  and  its  competitiveness, 
structured  along  these  nine  competitiveness  drivers  and  the  related  Key  Performance 
Indicators (KPIs). It also identifies future priorities and recommends actions where appropriate. 

The  Commission  thus  contributes  to  a  first  annual  cycle  where  the  Council,  the  European 
Council  and  the  European  Parliament  discuss  progress  and  necessary  measures  regarding  the 
future of the Single Market and competitiveness. 

1 See the Single Market Scoreboard (Economic resilience | Single Market Scoreboard (europa.eu), trade section). 
2 The Single Market at 30, of 16 March 2023, https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52023DC0162. 
3 Long-term competitiveness of the EU : looking beyond 2030, 16 March 
2023,https://commission.europa.eu/system/files/2023-03/Communication_Long-term-competitiveness.pdf. 

1 

 
 
 
 
Figure 1: Definition of competitiveness based on nine drivers 

Source: Long-term competitiveness Communication (COM(2023)168) 

1.  A functioning Single Market 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U  v a l u e 4 

KPI 1: Integration in the 
Single Market  

KPI 2: Conformity deficit 
(incorrectly transposed 
directives) 

Integration in the Single Market: trade over GDP 

Up 

26.3% for goods 

(2022) 

23.5% for goods 

(2021) 

7.5% for services 
(2022) 
6.6% for services 
(2021) 

0.5% 

1.2% (2023) 

1.3% (2022) 

infringement  proceedings  for 

It measures the number of directives transposed for 
incorrect 
which 
transposition  have  been 
the 
Commission 

launched  by 

4 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 

2 

 
 
 
 
 
 
 
 
 
The  Single  Market  is  a  prerequisite  for  long-term  competitiveness.  A  well-functioning 
Single  Market  has  provided  the  EU  with  a  strong  economic  base  in  the  last  30  years:  a 
large demand pool, diversified supply sources and opportunities for innovation and scaling 
up of production, while supporting strong social rights and fair working conditions. It has 
proven to be a powerful  tool for building resilient supply  chains, providing a geopolitical 
lever when required.   

The Commission and Member States have addressed obstacles to the Single Market functioning. 
In  2023,  through  the  Single  Market  Enforcement  Taskforce  (SMET),  Member  States 
committed  to  removing  301  prior  checks  for  professions  where  not  proportionate.  SMET  also 
screened  over  170  process-related  barriers  for  wind  and  solar  energy  projects,  committing  to 
removing  half  of  them.  This  objective  has  already  been  exceeded,  with  60%  of  the  confirmed 
barriers  having  been  addressed.  Based  on  evidence  from  the  SOLVIT  network,  a  project 
tackling IBAN related discrimination in the Single Market in the public sector and in telecoms 
was launched in 2023. 

Over this mandate, the Commission took prompt enforcement action when the core principles of 
the free access to markets were at stake or discriminatory practices emerged against non-national 
operators.  The  Commission  worked  in  particular  to  tackle  violations  of  EU  rules  on  public 
procurement  and late payments, to  ensure transparency and efficiency in  markets  supported by 
public  procurement,  and  to  defend  SMEs’  interests.  Preventive  tools  such  as  Single  Market 
Transparency Directive and the ex-ante assessment of new restrictions in national regulation of 
professional services were reinforced. 

The Communication Single Market at 30 sets out concrete targets and initiatives for cooperation 
between the Commission and Member States in enforcing existing rules and  removing national 
barriers,  for  instance  in  the  services  sector.  The  Commission  set  a  target  of  reducing  the 
conformity  deficit to  0.5% (i.e.  the maximum  percentage of incorrectly transposed  Directives). 
The actual rate improved in 2023 reaching 1.2% (see KPI 2), and the Commission will continue 
to work with Member States to reach this objective, as substantial additional growth5 could be 
realised  by  addressing  national  barriers,  notably  through  a  better  implementation  of  agreed 
rules. 

5  Mapping  the  Cost  of  Non-Europe  2019-24,  Study  of  the  European  Parliamentary  Research  Service,  2019  (also 
cited in the Single Market at 30 Communication).  
https://www.europarl.europa.eu/thinktank/en/document/EPRS_STU(2019)631745 

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Regulatory burden and simplification 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U   v a l u e 6 

KPI 17: Ease of regulatory 
compliance (Burden of 
government regulation) 

Business  perception  by  replying  to  the  question: 
“In  your  country,  how  easy  is  it  for  companies  to 
comply  with 
and 
government 
permits, 
requirements 
administrative 
reporting,  legislation)?  (1  =  Overly-complex;  7  = 
Extremely  easy)”  in  the  survey  for  the  Global 
Competitiveness  Index  of  the  World  Economic 
Forum. 

regulation 
(e.g. 

Up 

3.80 (2022) 

3.64 (2021) 

Regulatory burdens have started to decrease in the EU (see KPI 17), notably due to efforts at EU 
level. In 2022, the Commission’s proposals yielded EUR 7.3 billion more administrative savings 
than  costs7.  In  March  2023,  the  Commission  proposed  to  simplify  formalities for  companies 
operating in multiple Member States and further expand and upgrade the use of digital tools and 
processes in company law8. 

The  Commission  has  also  extended  the  implementation9  of  the  Single  Digital  Gateway10,  the 
EU’s  flagship  eGovernment  initiative.  Specifically,  since  December  2023,  Member  States  are 
obliged  to  provide  online  access,  for  national  and  cross-border  users,  to  21  types  of  important 
procedures11. The Internal Market Information (IMI) system connects 12 000 authorities and 
facilitates exchanges for 35 000 registered users on 20 policy areas and in all EU languages. The 
Road Transport Posting Declaration portal12, linked to the IMI system, allows the road transport 
sector  to  digitally  submit  a  single  uniform  driver  posting  declaration.  From  February  2022  to 
December 2023 33 million posting declarations were submitted via the portal. The Commission 
recently agreed on a voluntary electronic template for declarations of posting of workers with a 
significant  number  of  Member  States  and  is  working  on  a  multi-lingual  portal  for  such 
submissions. The Interoperable Europe Act13 establishes a structured cooperation mechanism 
between Member States and EU Institutions reducing barriers to cross-border and cross-sectoral 
digital public services14. 

The  Commission  has  implemented  the  ‘one  in,  one  out’  approach,  as  well  as  introduced  a 
mandatory  competitiveness  check  and  strengthened  the  SME  test  for  the  scrutiny  of  new 
proposals. It is also making progress towards the target of reducing the burden from reporting 
requirements by 25%. A first set of 41 initiatives to cut such burdens was presented in the 2024 

6 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends 
7 Annual Burden Survey 2022, https://commission.europa.eu/system/files/2023-09/ABS_20230912_0.pdf 
8 Proposal for a Directive to further expand and upgrade the use of digital tools and processes in company law  - all 
documents - European Commission (europa.eu) 
9 COM (2023) 534 
10 https://single-market-economy.ec.europa.eu/single-market/single-digital-gateway_en 
11 Annex II of Regulation (EU) 2018/1724. 
12 https://www.postingdeclaration.eu/landing. 
13 https://ec.europa.eu/commission/presscorner/detail/en/IP_23_5730  
14 https://commission.europa.eu/document/download/7ad24728-71d5-4148-a6a6-
2af7551726fe_en?filename=Communication Interoperable Europe Act 

4 

 
 
 
 
Commission  work  programme15.  For  example,  the  reform  of  the  Union  Customs  Code  is 
expected  to  bring  around  EUR  2  billion  in  cost  savings.  The  revision  of  the  Regulation  on 
European statistics will further save EUR 450 million16.  

Moreover, a call for evidence was launched on 17 October 2023 and the input from stakeholders 
will  feed  into  the  preparation  of  rationalisation  plans  by  all  departments  of  the  Commission. 
Further input will come in  2024 from  the Fit for Future Platform,  with  recommendations  from 
Member States and stakeholders for simplification and burden reduction, including on reporting 
obligations17. The upcoming Annual Burden Survey will report on the progress. 

More  generally,  efforts  at  EU  and  Member  State  level  are  required  to  further  simplify  the 
implementation of agreed legislation, paying particular attention to unjustified "gold plating" and 
addressing  the  cumulative  impacts  and  timing  of  implementing  legislation.  This  would  help  to 
reduce compliance costs and ensure greater visibility for investment decisions.  

A modernised Single Market 

The  EU  has  adopted  several  measures  to  help  consumers  benefit  from  the  Single  Market.  For 
instance, the common charger initiative is already simplifying the life of millions of Europeans. 
Efforts to address illegitimate green claims or initiatives on the right to repair also contribute to 
ease constraints for citizens and promote a greener economy.  

Decisive  regulatory  steps  have  been  taken  to  develop  a  Single  Market  in  the  digital  sector, 
providing  a  uniform  set  of  rules  for  businesses  to  operate  across  the  EU:  the  Digital  Markets 
Act18  to  prevent  gatekeeper  platforms  from  imposing  unfair  conditions  on  businesses  and 
consumers; the Digital Services Act19 to ensure that what is illegal offline is also illegal online, 
the Data Governance Act20 to increase data availability and trust in data sharing and overcome 
technical obstacles to the reuse of data; the Data Act21 to harmonise rules on fair access to data; 
and the AI Act to provide legal certainty and open the way for innovation in trustworthy AI22. 

In  addition,  as  a  reaction  to  the  disruption  of  the  Single  Market  caused  by  anti-COVID  19 
measures,  the  Single  Market  Emergency  Instrument  (SMEI)23  renamed  Internal  Market 
Emergency  and  Resilience  Act  (IMERA)24  will  ensure  that  the  Single  Market  continues  to 
function and support citizens and businesses in critical situations.  

15 2024 Commission work programme - European Commission (europa.eu) 
16 https://commission.europa.eu/system/files/2023-10/Factsheet_CWP_Burdens_10.pdf 
17  Three  out  of  the  eight  opinions  planned  for  2024  are  related  to  reporting  obligations,  covering  automating 
sustainability reporting; actions and methodology to avoid the build-up of unnecessary reporting obligations; and on 
the Sustainable Finance Disclosures Regulation.  
18 Regulation (EU) 2022/1925 
19 Regulation (EU) 2022/2065 
20 Regulation (EU) 2022/868   
21 Data Act | Shaping Europe’s digital future (europa.eu) 
22 https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai 
23 Single market emergency instrument - European Commission (europa.eu) Co-legislators have found agreement on   
1 February 2024, and SMEI is expected to be adopted during this legislature. 
24 SMEI / IMERA: Council and Parliament strike a provisional deal on crisis preparedness - Consilium (europa.eu) 

5 

 
 
 
 
 
SMEs and small mid-caps 

The goal of the SME Relief Package25 is to allow SMEs to compete and grow. As shown by a 
recent Commission study26, the companies outgrowing the SME definition – the so-called small 
mid-cap enterprises (SMCs)  –  play  a vital  role in the EU economy,  constituting  6%  of overall 
employment.  They  are  prominently  present  in  industrial  ecosystems  that  are  key  to  the  EU’s 
competitiveness  and  technological  sovereignty,  such  as  electronics,  aerospace  and  defence, 
energy, energy-intensive industries and health. Around 20% of all SMCs were SMEs three years 
earlier27.  Compared  to  SMEs,  SMCs  tend  to  demonstrate  a  higher  pace  of  growth,  level  of 
innovation  and digitisation, but  they still  face certain  similar challenges  such as administrative 
burden, including the need for more proportionality in new legislation and for targeted support. 
To enable the smooth transition of SMEs into SMCs, it is important to address these challenges 
in a coherent manner. 

A definition for SMCs is already used under the General Block Exemption Regulation28 and the 
Guidance  on  Risk  Finance29.  On  the  basis  of  this  definition,  the  Commission  will  monitor 
outcomes  for  both  SMEs  and  small  mid-caps  under  relevant  financial  programmes  and  take 
action  to  enhance  the  engagement  of  these  companies,  where  relevant.  Furthermore,  it  will 
develop  a broader dataset  on SMCs and deepen its  evaluation  of barriers  impeding  the growth 
and transition of medium-sized enterprises into SMCs, taking into account the views of the SME 
network  and  other  stakeholders.  This  will  inform  future  decisions  on  how  best  to  establish  a 
harmonised SMC definition for horizontal purposes, and to identify fields where it is relevant to 
frame proportionate regulatory, funding or policy measures.   

Enlargement 

In December 2023, the European Council paved the way for an enlargement of the European 
Union  and  thus  of  the  Single  Market30.  The  Commission  is  already  acting  to  integrate 
candidate countries into the Single Market by checking their progress in alignment with EU law, 
helping them make the necessary (and often substantial) political and economic reforms, and by 
preparing  them  for  the  rights  and  obligations  that  come  with  EU  membership.  Most  candidate 
countries  are  now  associated  to  the  Single  Market  Programme  and  the  Digital  Europe 
Programme. Roadmaps for the enhanced implementation of the Deep and Comprehensive  Free 
Trade Areas  with  Ukraine and Moldova have been agreed for 2023-2024 in  view of providing 
those countries with further access to the EU Single Market.  

25 SME Relief Package (europa.eu). See also annex 3A to this report SME relief package policy tracker. 
26 Study to map, measure and portray the EU mid-cap landscape - https://op.europa.eu/en/publication-detail/-
/publication/ad5fdad5-6a33-11ed-b14f-01aa75ed71a1/language-en/format-PDF/source-277396461  
27 https://www.esri.ie/system/files/publications/BKMNEXT429.pdf 
28 https://eur-lex.europa.eu/EN/legal-content/summary/general-block-exemption-regulation.html  
29 https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.508.01.0001.01.ENG&toc=OJ%3AC%3A2021%3A508%3ATOC  
30 The European Council decided to open negotiations with Ukraine and the Republic of Moldova, open accession    
negotiations  with  Bosnia  and  Herzegovina  once  the  necessary  degree  of  compliance  is  achieved,  and  to  grant 
candidate country status to Georgia: europeancouncilconclusions-14-15-12-2023-en.pdf (europa.eu). 

6 

 
 
 
The Single Market  requires political  ownership and should constitute a  common endeavour, 
jointly with all players and across all policy areas.  

Drawing  on  the  progress  achieved  under  this  mandate,  the  Commission  and  Member  States 
should  continue  to  complete  and  modernise  the  Single  market  in  particular  by  stepping  up 
correct  implementation  and  robust  enforcement  of  Union  law  at  national  level,  including  in 
relation to issues linked to "gold-plating". To achieve these goals, the Commission continues 
to  advocate  establishment  of  dedicated  national  Single  Market  Offices,  with  Member  States 
ensuring  senior  leadership  and  necessary  resources.  These  offices,  which  would  be 
complementary  to  other  collaborative  tools,  could  contribute  in  particular  to  addressing  the 
remaining barriers for services.  

The  implementation  of  Single  Market  rules  should  be  streamlined,  combining  preventive, 
collaborative  and  remedial  tools.  Member  States  should  achieve  the  concrete  targets  with 
respect to conformity and transposition of Directives. The SOLVIT-network, work within the 
SMET  and  dedicated  Single  Market  Offices  can  help  resolve  more  obstacles  to  the  Single 
Market, including for services. To do so, sufficient resources should be allocated to this work.  

Regulatory  burden  reduction  should  remain  a  priority  at  all  levels.  Regulatory  reforms  and 
support instruments should target in particular SMEs and small mid-cap enterprises. 

In parallel, the necessary groundwork and reforms for enlargement should continue to ensure 
a mutually beneficial integration of enlargement countries in European supply chains.  

2.  Access to private capital and investment 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U  v a l u e 31 

KPI 3: Private investment as 
a share of GDP 

Private investment is directly linked to the  ease  of 
access to private capital. 

Up 

KPI 4: Venture capital 
investments as share of 
GDP 

Progress in this field is a good indicator of progress 
in access to private capital in general. 

Up 

19.3% (2022) 

18.7% (2021) 

0.09% (2022) 

0.11% (2021) 

Private investment in the EU has held up well since the financial crisis compared to other 
international  players. Deepening the Capital Markets Union (CMU) is  essential to unlock 
private  investment  and  increase  the  EU’s  competitiveness.  Investments  needed  to 
accelerate  the  green  and  digital  transitions,  enhance  resilience  and  boost  the  Union’s 
competitiveness will have to primarily come from the private sector.  

In this mandate, of the 16 actions of the 2020 CMU action plan proposed by the Commission, 
almost  all  have  been  adopted  or  politically  agreed.  However,  despite  improved  EU  capital 
markets conditions, these measures alone will not complete the CMU and the availability of risk 
capital, such as venture capital, remains insufficient for the scaling up of innovative companies 
and to finance future growth.  

31 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 

7 

 
 
 
 
The EU Taxonomy regulation will enhance financing of environmentally  sustainable economic 
activities and boost the green transition. 

Financing  conditions  tightened  significantly  in  2023,  creating  a  more  challenging  investment 
environment.  Interest  rates  in  the euro area increased sharply,  while lending  standards for new 
loans  or  credit  lines  became  more  stringent  and  diverged  across  the  euro  area32.  The  EIB33 
reports availability of finance as an investment impediment for 44% of EU businesses.  

The current  size and depth  of the  EU capital markets remain  insufficient to  support the EU’s 
future  growth.  A  deeper  CMU  will  help  mobilise  more  savings  and  investment  capacity  to 
finance the real economy, reduce the costs of borrowing and facilitate investments in the Single 
Market, all of which are indispensable for a successful twin transition.  

Availability of risk capital (in particular for scaling up businesses) continues to be subdued. The 
EU’s  stock  market  capitalisation,  in  percentage  of  GDP,  is  less  than  half  of  that  of  the  USA 
(despite higher savings in the EU) and lower than that of Japan, China or the UK. Private equity 
and venture capital investment in digital and green tech firms have continuously increased since 
201634.  Venture  capital  was  at  0.09%  of  GDP  in  2022  (see  KPI  4),  double  the  level  of  2018 
(0.04%), but lower year-on-year and still a fraction of the level in the USA (0.75%) and China 
(0.58%).  

The number of EU scale-ups is  38% of that  in the US, though this  gap is  narrowing.  To keep 
improving  the  situation,  the  EIB  group  and  five  Member  States  launched  the  European  Tech 
Champions  Initiative  (ETCI)35,  a  fund  of  funds  structure  making  investments  in  large  scale 
venture  capital  funds  for  innovative  EU  companies.  This  action  complements  the  InvestEU 
originated funding opportunities for later stage VC fund managers such as EU-SCALe up Action 
for Risk capital, the EUIPO fund initiative. 

32 See for instance the Council Recommendation on the economic policy of the euro area, COM(2023) 903 final. 
33 EIB Investment Survey 2023: European Union overview. 
34 European Monitor of Industrial Ecosystems (EMI) SWD(2024) 77. 
35  On  13  February  2023,  initially  by  the  EIB  Group  with  contributions  from  Germany,  France,  Spain,  Italy,  and 
Belgium. 

8 

 
 
 
Deeper and more integrated capital markets are crucial to finance EU companies and support 
the  transition  towards  a  digital  and  sustainable  economy.  The  implementation  of  the  2020 
Capital Markets Union action plan measures will have a positive impact on the growth of EU 
capital  markets,  improve  access  to  market-based  sources  of  funding  for  EU  companies  and 
make it easier and more attractive to invest in EU companies. 

It  is  vital  for  Member  States,  private  stakeholders  and  the  EU  institutions  to  keep  working 
together  on  the  CMU,  including  by  ensuring  larger  pools  of  private  capital,  such  as  pension 
funds.  In  particular,  the  Commission  and  Member  States  should  promote  further  efforts  to 
increase direct access of corporates and others to capital markets, facilitating the supply in the 
EU of risk and venture capital, to support start-ups and enable the scaling-up of companies in 
Europe. 

3.  Public investment and infrastructure 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U  v a l u e 36 

KPI 5: Public investment as 
share of GDP 

Public investment plays a key role in developing and 
maintaining  business  supporting  infrastructures  like 
energy, transport or digital connectivity. 

Up 

3.2% (2022) 

3.2% (2021) 

Public investment has recovered from the low levels after the financial crisis. EU Cohesion 
Policy  funds,  the  Recovery  and  Resilience  Facility  (RRF)  and  other  programmes  have 
helped finance the green and digital transition while maintaining a level playing field and 
promoting convergence  across  the Single Market. However, increased  and more strategic 
public investment, including through more innovative instruments that help de-risk private 
investments,  is  needed  to  leverage  private  funding  and  deliver  the  EUR  650  billion37 
required annually for the twin transition and for Europe’s economic resilience.  

Public  investments,  at  3.3%  of  GDP,  are  just  ahead  of  those  in  the  UK  (3.3%)  and  somewhat 
behind those in the USA (3.6%). While most of the investment needs for the twin transition will 
be  financed  by  private  funds,  the  role  of  public  investments  remains  central,  for  instance  with 
targeted  use  of  financial  products  and  blending  of  financial  sources  to  catalyse  and  de-risk 
private  investments,  unlock  the  investments  in  infrastructure  as  well  as  to  support  projects  in 
areas  of  economic  security  interests  where  private  investments  might  be  lacking.  EU  funding 
remains necessary to address financing needs while avoiding fragmentation of the Single Market 
due to varying levels of national (temporary) State aid support, and to reduce regional disparities. 

36 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 
37  The  overall  additional  investment  needs  to  meet  the  objectives  of  the  twin  transitions  have  been  estimated  at 
around  EUR  650  billion  annually  for  2022  to  2030.  https://commission.europa.eu/strategy-and-policy/strategic-
planning/strategic-foresight/2022-strategic-foresight-
report_en#:~:text=It%20is%20estimated%2C%20at%20lower,regions%20in%20Europe%20and%20beyond. 
https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_3194  

9 

 
 
 
 
 
Figure 2: Public investment 

Source: European Commission, annual macroeconomic (AMECO) database 

Since  2021,  the  RRF  has  paid  out  over  EUR  222  billion,  and  the  Cohesion  Policy  funds 
disbursed EUR 192 billion in the period 2021 - 202438. InvestEU provided EUR 13.44 billion in 
EU guarantees and Horizon Europe mobilised over EUR 24 billion for science and innovation.    

More targeted instruments also play an essential role for key sectors through a mix of regulatory 
action  and,  when  available,  use  of  EU  or  national  funds.  The  Net-Zero  Industry  Act39,  the 
Chips  Act  and  the  Critical  Raw  Materials  Act  strengthen  the  EU’s  domestic  manufacturing 
capacity and encourage  businesses to exploit the potential of the Single Market.  The European 
Chips  Act  will support, through  EUR 3.3 billion from  the EU budget, close to  EUR 43 billion 
worth  of  investment.  Over  100  billion  EUR  of  public  and  private  investment  have  been 
announced  along  the  Chips  supply  chain.  Industrial  alliances40,  such  as  the  recently  launched 
Critical  Medicines  Alliance,  facilitate  stronger  cooperation  along  supply  chains  in  key 
technologies, contributing to EU’s competitiveness. 

The New European Innovation Agenda (NEIA)41 delivers critical guidance and support measures 
to  facilitate  access  to  finance,  promote  innovation  through  regulatory  testbeds  and  sandboxes, 
innovative procurement and talent development.  

The  Important  Projects  of  Common  European  Interest  (IPCEIs)  support  breakthrough 
innovations  or  infrastructure  projects  in  critical  technologies  areas.  To  date  seven  integrated 
IPCEIs  have  been  approved42,  for  a  value  of  EUR  27.9  billion  of  national  public  support, 
unlocking more than EUR 50 billion of private investments.  

38 Open Data Portal for the European Structural Investment Funds - European Commission | Data | European 
Structural and Investment Funds (europa.eu) 
39 Net-Zero Industry Act (europa.eu). 
40  Industrial alliances - European Commission (europa.eu)  
41  https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-
policy/new-european-innovation-agenda_en 
42  Two  in  batteries,  two  in  semiconductors,  two  in  hydrogen  ecosystems  and  one  in  cloud  and  edge  computing 
technologies. See also Annex 2 in SWD(2024) 78. 

10 

 
 
 
 
The  “Innovation  Fund”,  financed  through  the  revenues  of  the  EU  Emissions  Trading 
System,  supports  and  scales  up  innovation  in  net-zero  technologies  towards  full  technological 
and commercial maturity and is becoming a key public instrument to deploy the EU green deal 
industrial strategy. Given its success and over-subscription of large-scale calls for proposals, the 
Commission  will  seek  to  maximise  the  budget  under  the  Innovation  Fund  by  frontloading  the 
commitment of available funds. 

The “Strategic Technologies for Europe Platform” (STEP)43 will support investments for the 
development and manufacturing of critical technologies, in the sectors of clean tech, digital tech, 
deep  tech  innovation,  and  biotech.  STEP  will  channel  funding  under  existing  programmes  and 
support project promoters through an upcoming Sovereignty Portal. The investment potential of 
this  initiative  could  reach  dozens  of  billions  of  euros,  depending  upon  Member  States’ 
reprogramming decisions. 

More can also be done via strategic public procurement, amounting to around 14% of EU GDP. 
Currently,  environmental,  social  and  innovative  aspects  are  insufficiently  considered  in  public 
tenders44.    New  initiatives,  such  as  the  Net-Zero  Industry  Act45  introduce  environmental  and 
social  sustainability,  as  well  as  resilience  criteria  in  public  procurement.  This  should  inspire  a 
greater reliance on non-price aspects for the procurement of goods and services in general. 

The  further  deepening  of  the  Single  Market  should  be  accompanied  by  continued  public 
investment in key priority areas in all Member States, including at the regional level through 
Cohesion  Policy,  to  ensure  cohesive  growth,  competitiveness  and  resilience,  while  avoiding 
fragmentation of the Single Market. 

Financing  the  green  and  digital  transition  requires  a  strategic  combination  of  tools.  This 
requires  an  increased  and  more  innovative  use  of  funding  sources  at  European  level,  to 
catalyse and de-risk private investments. Public procurement should be used to encourage and 
reward sustainability, resilience, innovation, and socially responsible practices. 

4.  Research and Innovation 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U  v a l u e 46 

KPI 6: R&D expenditure as 
a percentage of GDP 

The total R&D expenditure (public and private). 

>3% 

beyond 2030 

2.2% (2021) 

2.3% (2020) 

KPI 7: Number of patent 
applications per million 
inhabitants 

Patents reflect the capacity of an economy to exploit 
knowledge and indicate the competitiveness edge that 
can be obtained through innovation. 

Up 

EPO-EU: 
151.1 (2022) 
151.75 (2021) 

43 COM(2023) 335 final.   
44  https://www.eca.europa.eu/en/publications/SR-2023-28.  The  2021  ‘Buying  Social’  guidance    issued  by  the 
European 
criteria, 
https://ec.europa.eu/docsroom/documents/45767 
45 https://single-market-economy.ec.europa.eu/industry/sustainability/net-zero-industry-act_en. 
46 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-

administrations 

implementing 

Commission 

support 

public 

such 

can 

term competitiveness” in SWD(2024) 78 provides information on longer trends. 

11 

 
 
 
 
Europe  is  a  scientific  powerhouse  that  produces  one  fifth  of  the  top  10%  most  cited 
scientific publications. However, this does not always translate into commercial leadership 
(see KPI 7), often because of the difficulties to scale up business activities in the EU. More 
efforts are required to support Europe’s efforts from lab to fab,  such as is being done for 
semiconductors  through  the  European  Chips  Act,  facilitating  research  collaboration  and 
providing support through Horizon Europe or the Digital Europe Programme.  

Innovation is  at  the heart  of a thriving and  competitive economy  and the  European  Innovation 
Scoreboard  202347  highlights  an  improvement  in  the  EU’s  innovation  performance  throughout 
Europe. 

The EU’s R&I investments have increased from 1.8% of GDP to 2.2% in twenty years (see KPI 
6) but slipped year on year and remain below the target of 3%,48 and unevenly distributed across 
regions and Member States. R&I investments remain below those in the USA (3.4% of GDP)49 
and China (2.4%), especially due to the gap in business sector R&I50 and stagnant public R&D 
investment. Moreover, the efficiency and impact of these investments are hampered by persistent 
structural challenges in several R&I systems, such as weak science-business linkages.    

The  EU  is  a  global  leader  in  the  development  of  technologies  that  combine  digital  and  green 
innovations,  with  a  large  share  of  EU  patenting  activities  concentrated  in  climate  change 
technology51. In the digital domain only, the EU share was 20% in 2020, similar to that of the 
USA.  

To  help  bridging  Europe’s  market  gap  in  scale-up  finance,  the  European  Innovation  Council 
(EIC), combines grants and equity to support promising deep tech start-ups and scale-ups. Over 
EUR  1  billion  of  investments  in  nearly  200  deep  tech  scale  ups  have  already  been  approved. 
Additionally,  the  European  Institute  of  Innovation  and  Technology  has  helped  mobilise  an 
additional EUR 7.3 billion of private investment in start-ups in strategic sectors such as batteries, 
hydrogen or health. 

 Under the Recovery and Resilience Facility, Member States are mobilising over EUR 47 billion 
in  R&I  investments  and  will  introduce  reforms  in  their  R&I  systems  in  addition  to  EUR  35 
billion under Cohesion Policy.  

   47  https://op.europa.eu/en/web/eu-law-and-publications/publication-detail/-/publication/04797497-25de-11ee-a2d3-

01aa75ed71a1  

       48 Long-term competitiveness of the EU looking beyond 2030 | European Commission (europa.eu) 

49 Total R&D spending (as a percentage of GDP) and total patent filings (PCT, per million inhabitants) have both 
been around 25%-40% below the USA in recent decades 
50 One reason for the lower rate of R&D investment of the EU business sector as opposed to US is due to structural 
differences  in  R&D  business  investment  sector  profile.  Both  the  USA  and  China  exhibit  particularly  high  R&D 
investment in high growth areas such as the IT/ICT and related services and in health-related areas (particularly the 
US).  In  comparison,  the  EU  leads  in  R&D  investments  of  the  automotive  sector  and  has  a  broader  industrial 
portfolio investing in R&D, including in industries developing and applying green technologies, for decarbonisation 
as  well  as  the  circular  economy.  For  additional  details,  see  the  2023  EU  Industrial  R&D  Investment  Scoreboard, 
European Commission, Joint Research Centre, Publications Office of the European Union, 2023, 
 https://data.europa.eu/doi/10.2760/506189. 
51 EIB Investment Survey 2023: European Union overview. 

12 

 
 
 
    
Despite all of this, total factor productivity growth in the EU has been less than half of that in the 
USA over the past 30 years. This calls for even more focus on strategic technologies (e.g. clean 
technologies,  critical  raw  materials  substitutions,  digital  technologies,  advanced  materials, 
advanced and clean production technologies) including those with dual-use potential.  

In  addition  to  increasing  EU  investments  in  research  and  innovation,  steps  are  required  to 
further  prioritise  research  efforts  around  the  EU’s  long-term  competitiveness  needs  and 
strengthen the translation of research results into practical business applications.  

Reforms are needed to modernise R&I systems to increase the impact of R&I investments. For 
instance,  strengthening  linkages  between  businesses  and  research  entities  and  improving 
support structures for the uptake of research and innovation results by industry, can make for 
an attractive business case.  

At EU level, the Commission will continue to develop and implement policies that target the 
promotion  of  deep  tech  and  green  tech  innovative  start-ups  and  scale-ups,  including  by 
building up the capabilities of the European Innovation Council. 

5.  Energy 

K P I  

D e s c r i p t i o n  

KPI 8: Share of energy from 
renewable sources 

Renewable energy generation (as proposed for the 
Renewable Energy Directive). 

T a r g e t  

L a t e s t   E U  v a l u e 52 

45% in 
2030 

23.02 (2022) 
21.77% (2021) 

KPI 9: Electricity prices for 
non- household consumers 

Electricity  price  for  industrial  consumers  gives  a 
good indication of energy affordability. 

Down and 
then steady 

EU IC band:53 
EUR 0.21 per kWh 
(Semester 1 2023) 
EUR 0.18 per kWh 
(Semester 1 2022) 

The EU leads the global  transition to a decarbonised  energy system. In 2022, greenhouse 
gas emissions were 32.5%54 lower than in 1990, while EU GDP increased by 67%. At the 
same  time,  Russia’s  war  in  Ukraine  sparked  an  energy  crisis  significantly  affecting 
households and the competitiveness of European industry. Though energy prices have now 
fallen,  they  remain  well  above  previous  long-term  trends,  and persistently  higher  than  in 
competing regions. More interconnected and integrated internal energy markets  will help 
to ensure access to affordable, abundant, reliable and decarbonised energy.  

From 2010 to 2021, emissions from the EU industrial ecosystems fell overall by 3%. Over the 
same period emissions from the energy supply sector fell by 35%55. 

52 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 77-78 provides information on longer trends. 
53 The  IC consumption band refers to medium-sized consumers with annual consumption between 500 MWh and 
2000 MWh and provides for a proxy on affordability. 
54 Climate Action Progress Report (2023) - COM/2023/650 final. 
55 Eurostat, Air emissions accounts, greenhouse gases by NACE Rev. 2 activity, quarterly data.  

13 

 
 
 
 
 
 
EU  electricity  prices  for  large-sized  industries were  slightly  lower  than  in  Japan  and  the  UK 
until 2021, albeit twice as high as in the USA. Since 2021, and beyond the shock triggered by 
Russian’s war of agression in Ukraine, the price differential with the USA has increased, to the 
detriment of EU’s competitiveness56.  

The  reform  of  the  EU  electricity  market  design57  is  expected  to  accelerate  clean  energy 
deployment  by  facilitating  long-term  contracts  that  provide  both  price  predictability  and 
investment certainty, thus helping to contain energy generation costs in the medium term. SMEs’ 
expenditure in energy-savings technologies has been increasing over the last five years across 
all  industrial  eco-systems,  most  notably  in  agri-food,  textile,  tourism  and  aerospace  and 
defence34.  Advanced  manufacturing  technologies,  such  as  industrial  robotics  and  additive 
manufacturing, can further help achieving savings. 

The EU will need to electrify massively its energy demand. This requires major investments in 
decarbonised  technologies.  Intra-EU  investments  in  renewables  have  grown  by  18.7  %  a  year 
from  2015  to  2022  reaching  EUR  38  billion  per  annum.  The  even  bigger  (EUR  92  billion) 
Foreign  Direct  Investment  outflow  confirms  the  leadership  of  EU  industry  in  this  area34.  The 
impact assessment of the Communication on Europe’s 2040 climate target shows that renewable 
energy in majority, complemented by nuclear energy, will generate over 90% of the electricity 
consumption  in  the  EU  in  204058.  The  Commission  also  launched  the  European  Industrial 
Alliance on Small Modular Reactors. 

It  will  also  be  essential  to  connect  new  production  centres  of  decarbonised  energy  to  new 
consumption  centres.  The  European  action  plan  on  grids  is  the  first  step  setting  out  several 
actions to accelerate grids deployment and faster integration of renewable energy59. It should be 
the  basis  for  future  comprehensive  actions  for  accelerating  the  development  of  European 
integrated  energy  infrastructure.  Digitalisation  is  also  at  the  core  of  the  new  grid  system60. 
Digitalisation, data access and automation are required to integrate all (new) energy sources and 
stabilise the system. 

Beyond deployment, the Net-Zero Industry Act will strengthen the manufacturing of net-zero 
technologies in the EU. The European Wind Power Action Plan sets out recommendations and 
commitments to support wind power manufacturing capacity in Europe61.  

The RRF and REPowerEU also play a key role with respect to the enhancement of the resilience, 
security  and  sustainability  of  the  EU´s  energy  system,  notably  through  investments  in  energy 
efficiency  and  in  renewable  energy  and  networks,  while  contributing  to  combatting  energy 
poverty. 

56 See for instance Orgalim’s Autumn 2023 Economic Outlook. 
57  Reform of the EU electricity market design (europa.eu) 
58 Moreover, the Member States’ alliance of nuclear energy has announced the intention to reach 150 GW capacity 

of nuclear energy by 2050. 

59 COM(2023)757. 
60 COM(2022)552. 
61 COM(2023)669. 

14 

 
 
 
 
 
Over the last five years, the EU has massively updated its energy policy toolbox to  meet the 
European Green Deal objectives, including in terms of its industrial plan.  

But  more  will  be  required  to  facilitate  the  deployment  of  decarbonised  electricity,  its 
integration into energy grids and increased manufacturing of net-zero technologies. All of this 
is indispensable to reduce energy prices, reinforce Europe’s competitiveness. 

Member States should contribute to these areas for instance via the implementation of the Grid 
and  Wind  Power  Action  Plans,  Renewable  Energy  Directive  and  SMET  work  on  permitting 
and rapid implementation of the Net-Zero Industry Act. Member States should make use of the 
STEP initiative to leverage the potential of all EU instruments, including EU Cohesion Policy 
Funds,  and  support  the  development  and  manufacturing  of  key  strategic  clean  energy 
technologies. 

6.  Circularity 

K P I  

D e s c r i p t i o n  

T a r g e t  

L a t e s t   E U  v a l u e 62 

KPI 10: Circular material use 
rate 

The circular material use rate measures the  share  of 
material recovered and fed back into the economy in 
overall  material  use.  Target  set  up  in  the  Circular 
Economy Action Plan: Doubling compared to 2020. 

23.4% by 

11.5% (2022) 

2030 

11.7% (2021) 

Europe  is  slowly  progressing  towards  a  more  circular  economy.  Since  2000,  the  EU 
industry’s resource productivity63 has increased by 37%, indicating a more efficient use of 
materials  in  EU  production,  but  the  EU  materials  footprint64  remained  stable  in  the  last 
decade65. Recently agreed legislation, once implemented, will improve the business case for 
circularity.  

More circularity in the economy means lower consumption of primary materials, less waste and 
reduced dependencies. It also comes with a significant potential for quality job creation, notably 
in  the  social  economy.  The  bioeconomy  has  the  potential  to  contribute  to  more  circularity,  for 
instance in the area of battery materials.  

At 11.5%, the rate of use of secondary raw materials in 2022 is less than half of the target agreed 
for 2030, showing significant untapped potential (see figure 3 and KPI 10). At the same time, the 
resource productivity of EU industry increased by 37%66 in twenty years, being now comparable 
to that of the USA and three times higher than that of  China.  

62 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 
63 This is the relationship between the size of the domestic economy and the use of domestic natural resources. 
64  This  is  the  total  amount  of  raw  materials  consumed  by  residents:    it  includes  materials  used  in  EU  production, 
adding materials embedded in imports and deducting materials embedded in exports. 
65 Europe’s material footprint (europa.eu). 
66 Eurostat: Material flow accounts and resource productivity – Statistic Explained (europa.eu). 

15 

 
 
 
 
 
 
Unsustainable  consumption  and  related  production  are  key  bottlenecks  to  circularity67.  Only 
20% of SMEs use recycled materials and only 11% adopt circular materials business models68.   

Recently  adopted  or  politically  agreed  legislation  creates  a  strong  business  case  for  more 
circularity in the EU. Upstream, the Critical Raw Materials Act provides that Union recycling 
capacity  should  cover  25%  of  the  Union’s  annual  consumption  of  strategic  raw  materials  by 
2030.  At  product  level,  the  Ecodesign  for  Sustainable  Products  Regulation  will  allow  to 
design  specific  circularity  criteria  for  product  categories  placed  on  the  EU  market69.  This  will 
help  address  Single  Market  fragmentation  due  to  diverging  national  rules  on  product 
sustainability.  The  digital  product  passport  will  facilitate  the  sharing  of  information  along  the 
supply  chains.  Market  surveillance  will  be  enhanced  to  address  the  enforcement  deficit  of 
applicable  ecodesign  requirements,  notably  from  imported  products.  Already  now,  the  EU 
regulatory  framework  for  batteries70  contributes  to  circular  value  chains  for  battery 
production.  In  parallel,  some  barriers  remain  to  be  addressed  to  favour  more  circularity,  for 
instance in relation to waste definition. At consumer level, the Empowering Consumers for the 
Green Transition Directive and the Green Claims Directive help consumers identify trustworthy 
and sustainable products. 

Figure 3: Circular material use rate (secondary materials use as % of overall material use) 

Source: Eurostat 

Recently adopted legislation will increase circularity in the EU. But to ensure its effectiveness, 
Member  States  need  to  work  to  strengthen  the  market  surveillance  of  product  regulatory 
requirements  linked  to  circularity.  In  addition,  Member  States  could  promote  sustainable 
material  consumption  by  supporting  the  industrial  use  of  secondary  materials  (industrial 
symbiosis among businesses) and platforms for the sharing economy were supply and demand 
of  recyclable/reusable  waste  could  meet.  Furthermore,  it  is  important  to  mainstream  the 
circular economy by boosting research and innovation, up- and re-skilling the workforce, and 
targeting the use of financing instruments.  

67 Conditions and pathways for sustainable and circular consumption in Europe — European Environment Agency 
(europa.eu). 
68 See survey on industrial ecosystems in Annex 6. 
69 Eco-design for Sustainable Products Regulation (COM/2022/142). 
70 Regulation (EU) 2023/1542. 

16 

 
 
 
 
7.  Digitalisation   

K P I  

D e s c r i p t i o n  

KPI 11: Digital intensity in 
SMEs 

Share of EU enterprises with at least a basic level of 
digital  intensity.  A  basic  level  entails  the  use  of  at 
least  four  of  twelve  selected  digital  technologies 
(such  as  using  any  AI  technology;  having  e-
commerce  sales  account  for  at  least  1%  of  total 
turnover;  etc.)  as  defined  in  the  Digital  Decade 
policy programme. 

T a r g e t  

L a t e s t   E U  v a l u e 71 

90% by 

69.30% (2022) 

2030 

61.36% (2021) 

KPI 12: Digital technologies 
adoption by companies 

Share  of  European  enterprises  that  have  taken  up 
cloud  computing  services,  big  data  and/or  Artificial 
Intelligence. Target set in the  Digital  Decade  policy 
programme. 

75% by 

2030 

Cloud computing 
services: 34% (2021)  
Big data: 14% (2020) 

Artificial Intelligence 

8% (2021)  

The rollout and uptake of digital technologies and the overall digitalisation of the economy 
are essential drivers for competitiveness and sovereignty. Several funding instruments and 
legislative  initiatives  are  now  in  place  to  enhance  the  digitalisation  of  businesses  and  the 
competitiveness  of  the  EU  information  and  communication  technology  sector.  The 
continuation  and  enhancement  of  collective  efforts  will  be  necessary  to  accelerate  digital 
transformation, to address the investment gaps and to strengthen digital capacities in line 
with the Digital Decade Policy Programme.  

Despite the EU’s strengths in specific digital technology areas, such as advanced manufacturing 
technologies  and  semiconductor  manufacturing  equipment,  the  EU  share  in  the  global 
information  and  communication  technology  (ICT)  market  has  drastically  decreased  in  the  past 
decade,  from  21.8%  (2013)  to  11.3%  (2022),  while  the  US’s  share  increased  from  26.8%  to 
36%.72  

The Digital Decade Policy Programme73 is a system of collaborative governance between the EU 
and national authorities to support the achievement of concrete 2030 objectives and targets. They 
focus  on  four  areas:  digital  skills;  digital  infrastructure;  digitalisation  of  businesses,  including 
through the uptake of advanced technologies such as Artificial Intelligence (AI), Cloud services 
and Big Data analytics; and digitalisation of public services. The first State of the Digital Decade 
report74  highlights  the  need  to  accelerate  and  deepen  the  collective  efforts  to  fulfil  our 
ambitions  in  the  field  of  semiconductors,  advanced  digital  skills  and  to  foster  the  digital 
transformation of European businesses. 

71 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 
72 ICT global market share worldwide 2023 | Statista. 
73 Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022. 
74  https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade.  It  is  a  comprehensive  framework 
that  guide  and  coordinate  all  actions  related  to  digital  with  an  industrial  policy  approach.  Notably,  it  sets  and 
monitors  the  achievement  of  Digital  Decade  targets,  as  measurable  goals  for  connectivity,  digital  skills,  digital 
business and digital public services. 

17 

 
 
 
 
 
 
Several EU funding instruments sustain the strengthening of digital capacities, infrastructure 
and  the  skills  needed  for  digital  transition.  For  instance,  DIGITAL  has  contributed  (with 
Horizon  Europe)  have  contributed  to  making  the  EU  a  world-class  level  leader  in  High 
Performance  Computing  and  provides  strategic  funding  to  support  projects  in  artificial 
intelligence,  advanced  digital  skills,  cybersecurity  and  for  the  rollout  of  digital  solutions  for 
public administrations and businesses. 

The  disruptive  emergence  of  generative  AI  creates  a  unique  opportunity  in  a  market  that  is 
expected to grow over 24.4% per annum from 2023 to 203075. To boost innovation in the field of 
AI,  the  AI  Act  provides  a  stable,  predictable  and  proportionate  legal  framework  for  AI 
developers, fostering trust among citizens and businesses in AI applications and thereby boosting 
their uptake in the EU.  

Besides,  complementing  the  regulatory  framework,  the  AI  Start-up  and  Innovation  package76, 
will  make  Europe  an  innovative  powerhouse  for  trustworthy  AI.  Building  on  Europe’s  world-
leading  high-performance  computing  infrastructure  (EuroHPC),  it  creates  “AI  Factories”  that 
bring together the key ingredients of AI – data, computing, algorithms, and talent – and serve as 
a one-stop-shop for AI startups to train and develop large AI models. In addition, it connects AI 
startups and researchers with industrial users, boosting innovative applications of generative AI 
across Europe’s 14 industrial ecosystems. 

Other  EU  policy  measures  have  started  already  to  build  up  domestic  capacity  for  other 
transversal  digital  technologies  and  focused  on  reducing  strategic  dependencies  concerning 
chips and cloud services77. The Chips Act will increase the EU’s manufacturing capacity78, with 
the  objective  of  ensuring  that  at  least  20%  of  world  production  in  value  of  cutting-edge 
semiconductors are produced in Europe by 2030. The IPCEIs on microelectronics and on Next 
Generation  Cloud  Infrastructure  and  Services  mobilise  large  companies  and  start-ups  to 
invest  in  major,  innovative  industrial  capacities79  and  to  develop  an  interoperable  and  openly 
accessible European data processing ecosystem, 

The  adoption  of  digital  technologies  by  EU  companies  can  substantially  increase  labour 
productivity across the economy. In 2022, 69% of EU SMEs had at least a basic level of digital 
intensity, as compared to the 2030 Digital Decade target of 90% (see KPI 11). The share of EU 
enterprises with 10 employees or more that have adopted digital technologies was 14% for Big 
Data in 2020, 34% for Cloud and 8% for AI in 2021, as compared to the 2030 target that 75% of 
companies  use  at  least  one  of  these  technologies  (see  KPI  12).  Digital  tech  start-ups  are  very 
active  in  most  industrial  ecosystems, with  health, mobility,  and cultural  and creative industries 
attracting the highest share34. Many of these start-ups offer basic digital solutions such as online 
marketplaces or software services, which contribute to the transformation of the ecosystems.  

75 Association for Computing Machinery, TechBriefs, summer 2023/ issue 8 -3626110 (acm.org). 
76  Commission  launches  AI  innovation  package  to  support  Artificial  Intelligence  start-ups  and  SMEs  |  Shaping 
Europe’s digital future (europa.eu). 
77  SWD(2021)352  Strategic  dependencies  and  capacities,  accompanying  the  update  to  the  2020  New  Industrial 
Strategy: Building a stronger Single Market for Europe's recovery. 
78 Already 14 new fabs are planned to go online and become operational by 2030. 
79 Including critical raw materials, equipment, wafers, research, pre-production and design. 

18 

 
 
 
The digitalisation of EU businesses, in particular SMEs, and public services is progressing but 
remains in some areas far below the 2030 Digital Decade targets and objectives. The EU and 
Member States should fully implement the Digital Decade Policy Programme to address this. 

The  EU  has  already  taken  various  policy  measures  to  reduce  strategic  dependencies  and 
promote  competitiveness  by  stepping  up  investments  in  strategic  technologies,  such  as 
semiconductors, cloud services, AI and High-Performance Computing. To be more effective, 
these  policies  require  Member  States  to  align  strategies  to  build  industrial  capacity  in  the 
relevant areas.  

8.  Education and skills 

K P I  

D e s c r i p t i o n  

KPI 13: Adult participation in 
education and training every 
year (average of male and 
female) 

An  increased  participation  in  training  will  indicate 
good  progress  in  the  development  of  skills  for 
sustainable  competitiveness  (target  set  in  Porto 
Summit Targets, Social Pillar). 

T a r g e t  

L a t e s t   E U  v a l u e 80 

60% by 

37.4% (2016)  

2030 

Based on the adult 
education survey, 
which was carried out 
in the past once every 
6 years. 

KPI 14: Adult employment 

rate 

An increased employment rate contributes to socially  
sustainable  competitiveness  (target  set  in  Porto 
Summit Targets, Social Pillar). 

78% by 

74.6% (2022) 

2030 

73% (2021) 

KPI 15: ICT specialists 
(average of female and male, 
% of employment) 

This  indicator,  one  of  the  targets  of  the  Digital 
Decade  policy  programme,  measures  progress 
towards a well dimensioned workforce specialised in 
the  development  and  deployment  of  digital 
technologies. 

20 Million by 
2030 (i.e. ca. 
10% of total 
employment) 

Candidate KPI 15a: Average 
test scores for 15 year olds 
(PISA) 

PISA  is  the  OECD's  Programme  for  International 
Student  Assessment.  PISA  measures  15-year-olds’ 
ability to use their reading, mathematics and science 
knowledge and skills to meet real-life challenges. 

Up 

9.4 million (2022) 

8.9 million (2021) 

Percentage of total 
employment: 
4.6% (2022) 

4.5% (2021) 

Mathematics: 
474 (2022) 
492(2018) 
Reading: 
475 (2022) 
488(2018) 
Science: 
484 (2022) 
488(2018) 

At 74.6% in 2022, the EU is on track to reach its 2030 employment rate target of 78%. And 
yet, three quarters of SMEs currently face labour and skills shortages, which the Pact for 
Skills  and  measures  facilitating  labour  mobility  have  started  to  tackle.  Availability  of 
quality jobs, addressing gender gaps and promoting equal opportunities for all are key for 

80 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 

19 

 
 
 
 
 
 
 
 
attracting  and  retaining  the  workforce.  A  skilled  workforce  is  a  key  factor  for 
competitiveness, in a context of ongoing demographic change81.  

The  green  and  digital  transitions  create  demand  for  new  skills,  which  requires  up-  and  re-
skilling of the workforce. For instance, between 35% and 45% of the workforce in the building 
renovations  sector  will  need  training  in  energy  efficiency82.  ICT  skills  are  highly  demanded, 
although specific needs vary substantially across ecosystems (see Figure 4). The number of ICT 
specialists  has  reached  9.4  million  in  2022,  representing  4.6%  of  total  employment  and 
progressing towards the 2030 goal of 20 million people (see KPI 15). On the other hand, in the 
EU only  about  one adult in  three participates in  learning activities every  year (see KPI 13).  In 
addition, the average scores for 15-year olds have fallen for the EU in 2022 compared to 2018 in 
all disciplines, where the EU is out-performed by its main competitors. This suggests that Europe 
is facing a problem in terms of equipping young people with basic skills 

Figure 4: % of online job advertisements requiring at least moderate or advanced digital skills, EU-27. 

Source:  Technopolis  Group  analysis  based  on  Cedefop  Skillovate  data,  for  the  European  Monitor  of  Industrial  Ecosystems  (EMI) 
project 2023. 

The EU disposes of policy tools to adress these challenges83. Cohesion funding and in particular 
the  European  Social  Fund  Plus  (ESF+)84  supports  national  investments  in  human  capital. 
Through  the  Pact  for  Skills,  and  through  the  specific  partnerships  set  out  in  each  of  the  14 
industrial  ecosystems,  the  EU  is  contributing  to  the  required  up-  and  reskilling  of  millions  of 
workers across the industrial ecosystems. 1 500 economic and social partners pledged to up- and 

81 Communication on Demographic change in Europe: a toolbox for action, COM(2023) 577 final 
82 ETUC, “Skills and Quality Jobs in Construction”: 230630_-_jtc_study_report_may_2023.pdf (ituc-csi.org). 
83  For  example,  the  Learning  Lab  on  Investing  in  Quality  Education  and  Training  helps  Member  States  identify 

policies which are particularly effective in boosting basic and advanced skills. 

84 For the 2021-2017 programming period, ESF+ investments in education and skills should amount to over EUR 42 
billion (total budget), with over EUR 15 million dedicated to adult learning. National plans to use the resources of 
the  ESF+  or the Recovery and Resilience Facility include many activities to re-skill the workforce; for about half 
Member States, they also include action towards schemes of individual learning accounts, implementing a Council 
Recommendation of June 2022. 

20 

 
 
 
reskill  10  million  workers  by  2030,  with  over  15 000  training  programmes  already  developed. 
Besides,  under  the  Net-Zero  Industry  Act,  the  Commission  is  supporting  the  launch  of  skills 
academies to  scale-up the manufacturing  and installation of net-zero technologies and the  raw 
materials  required  for  them85.  The  Technical  Support  Instrument    is  further  helping  Member 
States  in  designing  and  implementing  structural  reforms  to  promote  up-  and  reskilling  of  the 
population and to improve young persons’ skills. The Talent Booster Mechanism86 supports EU 
regions affected by the accelerated decline of their working age population. 

Mobility of workers in the Single Market can help alleviate skills shortages87. However, so far it 
concerns relatively few EU workers (3.8%88) and is far more widespread among the high-skilled. 
Only 14% of EU SMEs (compared to 30% of large firms) have tried to recruit staff from other 
EU  Member  States89.  Regulatory  or  administrative  requirements  often  impede  labour  mobility 
and simplification is needed. When moving for work, EU citizens face differences in registration 
practices with local authorities and access to the national IT systems90. The rate of recognition 
of professional qualifications for accessing a regulated profession in another  Member State is 
reasonably  high  in  a  large  majority  of  Member  States,  but  in  certain  professions  and  countries 
restrictive  qualifications  requirements  and  lengthy  procedures  remain91.  To  facilitate  the 
attraction  of  workers  from  third  countries,  the  Commission’  ‘skills  and  talent  mobility 
package’92  includes  recommendations  to  Member  States  on  how  to  ease  the  recognition  of 
qualifications of third country nationals93 and a proposal for a Regulation on the establishment of 
an EU Talent Pool94. 

As  a  follow-up  to  the  Val  Duchesse  Social  Partners  Summit,  which  took  place  on  31  January 
2024,  the  Commission,  in  cooperation  with  social  partners,  will  come  forward  with  an  Action 
Plan to address labour and skills shortages, by spring 2024.  

85 Skills academies develop learning programmes offered to education and training providers in the Member States. 
Based on the existing model in the batteries sector, the academies aim to train 100 000 learners each within 3 years 
from  their  establishment.  In  addition,  the  Cyber  Skills  Academy  will  bring  together  existing  initiatives  on  cyber 
skills and improve their coordination, in view of closing the cybersecurity talent gap Cyber Skills Academy | Digital 
Skills and Jobs Platform (europa.eu).  
86 harnessing-talents-regions_en.pdf (europa.eu) 
87 European Commission (2023), Employment and Social Developments in Europe. 
88 Labour mobility and matching across borders | Single Market Scoreboard (europa.eu). In addition only 17% of EU 
citizens appear to have ever lived or worked in a country other than their own (see European Commission (2022), 
Eurobarometer 528 “Intra-EU mobility after pandemic”).  
89 European Commission (2023), Flash Eurobarometer 537 ”SMEs and skills shortages”. 
90 Flash Eurobarometer 529 European Year of Skills: Skills shortages, recruitment and retention strategies in small 
and medium-sized enterprises Report. 
91 Access to Services and Services Markets | Single Market Scoreboard (europa.eu).  
92 Communication on Skills and Talent Mobility, COM(2023) 715. 
93 C(2023) 7700 final.  
94 COM(2023) 716 final.  

21 

 
 
 
 
 
A more effective and targeted use of EU funds for investment in education and skills at national 
level,  for  instance  in  order  to  support  actions  under  the  Pact  for  Skills  and  net-zero  skills 
academies, can help achieving progress in aligning education and training with skills demand.  

Further,  workers’  and  service  providers’  mobility  could  be  facilitated  through  proportionate 
access  requirements  for  regulated  professions,  smoother  recognition  of  professional 
qualifications and simpler and more digital registration practices for citizens moving to another 
Member State. 

9.  Trade and open strategic autonomy 

K P I  

D e s c r i p t i o n  

T a r g e t  

KPI 16: Trade with the rest of 
the world (as share of GDP) 

Trade  with  the  rest  of  the  world  (as  share  of 
GDP) 

Up 

Candidate KPI 16a: Exports 
of goods and services as a 
share of the rest of the world 
imports 

Exports  of  goods  and  services  of  the  EU,  UK, 
USA,  Japan,  and  China  as  respective  shares  of 
the rest of the world’s imports. 

Stable or Up 

L a t e s t   E U  v a l u e 95 
17.6% for goods (2022) 
14.8% for goods (2021) 

7.7% for services (2022) 
6.9% for services (2021) 

16.2% for goods (2022) 
16.4% for goods (2021) 

33.1% for services (2022) 
35.2% for services (2021) 

Trade  is  key  to  the  EU’s  long-term  competitiveness.  It  fosters  efficiency  and  innovation, 
and  opens  up  markets  for  EU  operators.  The  EU  draws  economic  and  political  strength 
from  its  position  as  the  largest  trader  and  investor:  it  is  the  world’s  largest  exporter, 
accounting  for  16%  of  global  exports.  The  EU  is  a  promoter  of  and  thrives  on  open  and 
rules-based trade. At the same time, new risks arising from increased geopolitical tensions, 
unfair  trade  practices  and  asymmetric  dependencies  have  led  the  EU  to  take  new  steps, 
encouraging  supply  diversification,  by  reinforcing  trade  and  investment  links  as  well  as 
strengthening  manufacturing  capacity  in  critical  areas.  The  EU  is  also  using  its  trade 
defence tools and adding to its toolbox to defend a level playing field for EU businesses. 

Trade  is  key  to  the  EU’s  long-term  competitiveness.  Extra-EU  trade  in  goods  and  services 
amounted  to  18%  and  8%  of  EU  GDP  in  2022,  respectively.  The  EU  is  the  largest  exporter 
globally (16% of imports of all countries, similar to China and significantly ahead of the USA). 
The EU has a particularly strong performance in services (see Figure 5 ) and in high-tech exports 
(23%)  although  that  share  has  gradually  fallen  over  the  last  decade96.  The  EU  also  dominates 
global exports in several manufacturing sectors, such as chemicals and automotive markets (see 
Figure  6),  where  however  the  latest  developments,  notably  the  energy  crisis  and  China's  fast 
growth  in  clean  tech  markets,  have  resulted  in  market  share  losses.  In  fact,  a  combination  of 
‘push’ (higher energy costs in the EU) and ‘pull’ (very attractive investment conditions in third 

95 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-
term competitiveness” in SWD(2024) 78 provides information on longer trends. 
96 Economic resilience | Single Market Scoreboard (europa.eu). 

22 

 
 
 
 
 
 
 
countries)  factors  could  negatively  affect  the  investment  required  in  Europe  for  a  successful 
green and digital transition.   

Figure 5 : Share of world exports: total (left); services (right)  

Source: European Commission based on WTO (World Trade Organization) 

Figure 6: Share of world exports: EU, China, USA (%): chemicals (left); automotive (right)  

Source: European Commission based on WTO 

The  COVID-19  pandemic  crisis  and  Russia’s  invasion  of  Ukraine  have  revealed  the  Single 
Market’s  vulnerability  to  supply  chain  disruptions,  which  required  bold  action,  including 
reciprocity  measures,  joint  purchasing,  and  diversified  supply.97  The  EU  Energy  Platform  has 
been key to pooling demand of the European buyers and securing supplies of gas to Europe from 
the  international  producers  and  suppliers.  It  could  be  used  as  blueprint  for  organising  the  joint 
purchase of  strategic commodities including hydrogen and critical raw materials.  

The  EU’s  exposure  to  China  has  increased  over  the  last  two  decades.  Recent  export  controls 
that China put on gallium, germanium and artificial graphite products show the inherent risks in 
far-reaching  economic  dependence  on  imports  from  one  non-EU  supplier.  In  this  context,  the 
Commission is developing and implementing its de-risking strategy with regard to China.     

       97 REPowerEU (europa.eu). 

23 

 
 
 
 
 
In response to the request of the European Council of October 2020, the Commission identified 
and started to address the strategic dependencies98 of the EU. Strategic dependencies represent 
around  9.2%  of  total  extra-EU  imports,  with  single  points  of  failure  (SPOFs)99  in  40%  of  the 
identified  cases.  Key  sectors  like  space  and  defence  are  also  exposed  to  foreign  dependencies 
that call for an increase of intra-EU integration of these markets.  

Several  non-EU  countries  have  taken  measures  to  reduce  their  own  dependencies  and  boost 
credit and investment into strategic sectors100. Aided by its state subsidies favouring state-owned 
enterprises, support programmes, government guidance funds and trade practices, China is now 
at  the  forefront  of  the  clean  tech  market.  China’s  pipeline  of  announced  investments  exceeds 
USD 280 billion, leading to overcapacities and price pressure that could jeopardise the business 
case for industries elsewhere. With the Inflation Reduction Act (IRA), the USA has stepped up 
its efforts to fight climate change.  The US approach is based on subsidies to create a domestic 
manufacturing base of net-zero technologies. Some elements of the IRA, notably with respect to 
discriminatory  content,  assembly  requirements,  and  production  subsidies,  have  raised  concerns 
for the EU and other international partners.101  For example, the IRA tax credits increase the cost 
advantage for the domestic production of battery packs by 25-30% of total production costs102. 

To  address  such  challenges,  the  EU  has  developed  its  own  toolbox,  combining  efforts  to 
diversify supply and boost domestic capacity103.  

The Commission continues to be actively engaged to safeguard and reform the WTO to address 
competitive  distortions  more  effectively,  with  the  upcoming  13th  Ministerial  Conference 
marking an important opportunity. It has also concluded Free-Trade Agreements and Economic 
Partnership Agreements, such as with New Zealand, Kenya and Chile, and is negotiating others. 
In parallel, to accelerate industrial cooperation, the EU has concluded Strategic Raw Materials 
Partnerships  with  Canada,  Ukraine,  Kazakhstan,  Namibia,  Argentina,  Chile,  the  Democratic 
Republic  of  Congo,  Zambia  and  Greenland.  These  partnerships  facilitate  industrial  projects  on 
raw  materials  in  non-EU  countries  with  EU  off-takers104  and  support  the  development  of 
sustainable value chains  and quality  local  jobs.  The partnerships with  developing countries are 

98 Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission; 
SWD(2021)352  “Strategic  dependencies  and  capacities”;  SWD(2022)  40  final  “EU  strategic  dependencies  and 
capacities: second stage of in-depth review”; Single Market Economic Papers, n. 14 “An enhanced methodology to 
monitor the EU’s strategic dependencies and vulnerabilities - European Commission (europa.eu). 
99 The risk of SPOFs depends on two product features: (1) the existence of a central node in world trade networks 
for that product, and (2) a high concentration of world exports in one country. The calculated risk of global SPOF is 
obtained by combining these two indicators. For further details, please see p. 18 in Single Market Economic Papers, 
n. 14 (reference above).  
100  Annex  5  to  this  Communication  provides  an  overview  of  resilience  measures  of  key  international  partners 
(SWD(2024) 78). 

       101 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5245. 

102  Deloitte  (2023),  “Sustainability  &  Climate  IRA  and  the  net-zero  race  –  How  EU  industrial  policy  should 
respond”, p11. 
103 This includes, among others, efforts undertaken as part of the Green Deal Industrial Plan, including the Net-Zero 
Industry Act, the Temporary Crisis and Transition Framework. 
104 For instance, in relation to the strategic partnership with Kazakhstan, EU and Kazak companies have established 
cooperation for the recovery of rare earth elements from uranium mining waste, in airborne geophysical exploration 
and  sustainable  processing  of  two  tungsten  deposits  in  Kazakhstan,  sometimes  with  the  involvement  of  EU  and 
EBRD financing. 

24 

 
 
 
underpinned  by  the  broader  EU's  Global  Gateway  strategy.    The  EU  has  also  concluded  four 
Digital  Partnerships,  with  Japan,  Korea,  Singapore,  and  Canada,  that  focus  in  particular  on 
secure  5G,  cybersecurity,  quantum  computing  and  the  resilience  of  the  semiconductor 
industry105. The EU is also working towards binding digital trade rules with key partners106.  

The EU has also adopted a series of new instruments alongside its trade defence instruments to 
defend competition on an equal footing107. The Commission has launched in particular a formal 
investigation against distortive subsidies of imported battery electric vehicles from China108. 

Furthermore,  the  EU  has  also  adopted  the  European  Economic  Security  Strategy.  The 
Commission  responds  to  identified  risks  by  proposing  measures  to  promote  the  EU’s 
competitiveness, to protect the EU’s economic security and to further strengthen cooperation by 
partnering with a wide range of countries. The Commission adopted in January 2024 a package 
of proposals to implement this Strategy109.  

The EU should build a more modern network of trade agreements, partnerships and alliances, 
while continuing to work on reinforcing multilateral cooperation and open trade. 

At the same time, our improved arsenal of trade protection tools can enhance economic security 
and  resilience.  The  EU  should  deploy  trade  defence  to  protect  the  Single  Market  when 
necessary  and  continuously  work  to  assess  and  address  economic  security  risks  in  a  complex 
environment.  

The  Commission  and  Member  States  should:  (1)  actively  monitor  the  resilience  of  strategic 
supply  chains  and  engage  in  the  risk  assessments  foreseen  under  the  Economic  Security 
Strategy; (2) align strategies on supply chains and build industrial capacity in areas of strategic 
importance,  exploiting  the  synergies  of  coordinated  action,  notably  via  the  Semiconductors 
Board,  the  Critical  Raw  Materials  Board  and  the  Net-Zero  Europe  Platform;  and  (3)  promote 
diversification through cooperation between European and partner countries’ industrial players 
in projects linked to the raw materials and digital partnerships established by the EU. 

Conclusion 

In  a  fast-changing  and  challenging  global  geopolitical  context,  the  Single  Market  remains  the 
EU’s  strongest  asset.  This  Communication  reminds  us  that  the  Single  Market  is  not  a  static 
achievement.  Its  health  and  the  competitiveness  of  our  economies  depend  on  our  joint  and 
continuous efforts to tend to it and ensure that it remains aligned with economic realities.  

Over  the  past  few  years,  the  EU  has  modernised  the  Single  Market  by  organising  its  digital 
space, providing a uniform set of rules for businesses to operate online across the EU. The EU is 
also  engaged  in  promoting  a  more  circular  economy,  providing  business  opportunities  for 
companies and savings for consumers.   

  105 Digital Partnerships | Shaping Europe’s digital future (europa.eu). 

106 Negotiations with Japan have been concluded and are on-going with South Korea and Singapore. 

     107  For instance, the EU has adopted the EU Foreign Subsidies Regulation, Regulation on the screening of Foreign 

Direct Investment, the Anti-Coercion instrument, the International Procurement Instrument. 

      108 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4752.  

109 New tools to reinforce the EU’s economic security - European Commission (europa.eu).. 

25 

 
 
 
 
In  addition,  the  EU  has  made  efforts  to  remove  hurdles  to  investment.  The  Commission  has 
initiated a decisive drive to reduce reporting burden. EU instruments support investments in the 
green and digital transition. The Pact for Skills and measures facilitating labour mobility aim to 
respond to skills shortages. New measures, such as the Chips Act, the Net-Zero Industry Act or 
the Critical Raw Materials Act will accelerate manufacturing projects in the technologies of the 
future and address supply chain vulnerabilities.  

This  Communication  identifies  areas  for  maintaining  and  improving  the  EU’s  global 
competitiveness, notably:  

•  Dedicated efforts to improve and simplify the implementation of agreed rules, including 
by avoiding “gold plating”, to facilitate doing business and entrepreneurship in Europe.  
•  The  Commission  and  Member  States  should  accelerate  efforts  to  address  energy  costs, 
through accelerated deployment of decarbonised energy and investment in infrastructure, 
including grids and cross-border interconnections.  

•  The  Commission  and  Member  States  should  continue  to  prioritise  the  deployment  of  a 
true and deep Capital Markets Union, to facilitate access to private funding, not least to 
risk and venture capital, and to enable the scaling-up of companies in Europe.  

•  Continued  public  investment  is  needed  to  ensure  Europe’s  competitive  edge  in  key 
priority  areas,    in  the  light  of  the  success  of  Next  Generation  EU  and  REPowerEU. 
Timely  implementation  of  Union  funds  such  as  Cohesion  policy  instruments  can 
contribute  to  the  level  playing  field  and  enhance  regional  convergence  in  the  Single 
Market,  including  through  increased  investments  in  strategic  technology  fields  covered 
by STEP. 

•  Steps  are  required  to  further  prioritise  research  efforts  and  strengthen  the  translation  of 

research results into practical business applications.  

•  Not least to ensure that EU undertakings can continue to thrive in digital, clean tech and 
other strategic sectors, the EU should continue to promote fair and open trade and employ 
trade defence instruments to protect the Single Market when necessary. 

•  The  skills  and  labour  gaps  should  receive  increased  attention  in  the  context  of  wider 
demographic  trends,  notably  via  efforts  on  education  and  training,  but  also  by  easing 
skills and talent mobility within and to the EU. 

Against  this  background,  this  Communication  lays  out  areas  and  directions  to  succeed  in  the 
drivers agreed in  the Long-Term Competitiveness  Strategy and to  work towards the objectives 
set there and in the Communication “Single Market at 30”.  

This  discussion  will  continue  and  will  see  crucial  contributions  with  the  publication  of  Enrico 
Letta’s  upcoming  High-Level  Report  on  the  future  of  the  Single  Market  and  Mario  Draghi’s 
Report on the future of European competitiveness. 

Pending these contributions, the Commission invites the Council, the European Council and the 
European  Parliament  to  discuss  the  current  situation  and  prospects  for  progress  in  the  Single 
Market and competitiveness in light of the present Report. 

26