Europe vs China: Competitiveness in a Changing World — Part 6: Europe’s Actual Priority Agenda and Actions

 


Europe vs China: Competitiveness in a Changing World — Part 6: Europe’s Actual Priority Agenda and Actions

About this Series

This article is the final part of a multi-part series examining how Europe’s competitiveness compares with China, what structural imbalances have emerged, how these shape geopolitical realities, and what priority agenda Europe must pursue to restore strategic strength. At the end of this series, we now evaluate Europe’s actual priorities and policy actions, measuring them against the ideal agenda defined in Part 5. This completes a coherent analytical framework for understanding Europe’s current competitive position and future trajectory.

What We Learned from Parts 1, 2, 3, 4 and 5

Part 1 established the analytical tools needed to compare Europe and China across productivity, industrial scale, systemic factors, and strategic autonomy.
Part 2 revealed significant competitive imbalances: Europe leads in high-value science and specialised industries, while China dominates in large-scale manufacturing, supply-chain control, and cost competitiveness.
Part 3 demonstrated how these economic asymmetries translate into geopolitical leverage and strategic constraints.
Part 4 traced Europe’s weaknesses to structural roots—fragmentation, underinvestment, regulatory burdens, high energy costs, demographic pressures, and loss of manufacturing depth.
Part 5 presented the ideal priority agenda Europe would need to restore competitiveness, centred on seven pillars: strategic industrial scale-up, capital mobilisation, regulatory reform, energy competitiveness, talent strategy, supply-chain resilience, and governance reform.
Combined, these parts show that Europe must undertake a systemic transformation. The question now is: how close is Europe to doing this in practice?

About This Part

Part 6 evaluates Europe’s actual policies, initiatives, and strategic programs against the ideal agenda defined in Part 5. This comparison reveals areas of alignment, areas where ambition exists but execution falters, and areas where Europe has yet to address critical weaknesses. The resulting assessment offers a realistic picture of Europe’s current competitiveness trajectory and the scale of the gap that remains.

1. Introduction: Europe Has a Strategy—But Not Yet a Transformation

Europe has launched a wide variety of initiatives in semiconductors, clean technologies, critical raw materials, industrial decarbonisation, digitalisation, and innovation. Many of these initiatives point in the right strategic direction. Yet Europe’s underlying competitiveness continues to erode because these initiatives lack the scale, speed, and coordination required for systemic impact.

Part 6 therefore assesses not merely whether Europe is acting, but whether it is acting with enough coherence, commitment, and capacity to reverse structural decline.

2. Pillar 1 — Scaling Strategic Industries

Assessment: Europe has identified the correct strategic sectors and launched meaningful initiatives such as the European Chips Act, the Net-Zero Industry Act, and Important Projects of Common European Interest in batteries, microelectronics, and hydrogen. However, investment levels remain below those of the US and China, permitting delays persist, and initiative fragmentation reduces impact.

Verdict: Partially aligned, but far below necessary scale and speed.

3. Pillar 2 — Mobilising Capital at Scale

Assessment: Europe has powerful financial instruments (RRF, InvestEU, EIB programs, national funds), yet lacks the unified capital markets and risk appetite necessary to finance industrial megaprojects. The European Sovereignty Fund remains unrealised. Private capital mobilisation is insufficient.

Verdict: Ambition exists, but architecture and risk culture remain inadequate.

4. Pillar 3 — Making Regulation Pro-Speed and Pro-Innovation

Assessment: Europe acknowledges the need for faster permitting and simpler regulation. NZIA, CRMA, and AI regulatory sandboxes are steps forward. Yet permitting remains slow, administrative burdens remain heavy, and regulatory fragmentation persists across member states.

Verdict: Incremental progress, but insufficient transformation.

5. Pillar 4 — Restoring Energy and Infrastructure Competitiveness

Assessment: Europe continues to expand renewable energy and strengthen energy diversification. However, industrial energy prices remain structurally higher than in the US or China, grid expansion is slow, and cross-border energy integration remains incomplete.

Verdict: Significant activity but competitiveness disadvantage remains acute.

6. Pillar 5 — Talent, Skills and Migration

Assessment: Europe is taking steps to address skills shortages through training academies, digital skills strategies, and vocational reforms. Yet gaps persist in STEM talent, technician-level skills, and high-skilled migration remains fragmented and uncompetitive relative to global rivals.

Verdict: Efforts underway but insufficient; skills gap widening.

7. Pillar 6 — Supply-Chain Resilience

Assessment: The Critical Raw Materials Act, diversification partnerships, recycling programs, and domestic extraction initiatives represent strong strategic alignment. Europe has moved decisively to reduce dependency in vulnerable areas. Execution remains slow but directionally robust.

Verdict: Strongest pillar; moderate gap.

8. Pillar 7 — Governance and Execution Capacity

Assessment: Europe excels in strategy formation but lacks the integrated governance structure required for execution. Decision-making remains fragmented across institutions and member states, with few mechanisms ensuring speed, accountability, or continuity. State-aid divergence also fragments industrial development.

Verdict: The weakest pillar; systemic execution gap.

9. Overall Gap Analysis: Where Europe Stands vs. Where Europe Needs to Be

Across the seven pillars, the central pattern is clear: Europe’s ambition is higher than its execution capacity, and its execution capacity is insufficient to shift actual competitiveness outcomes.

The next step is to quantify the scale of this gap.

9.1 Competitiveness Transformation Scorecard

To consolidate the comparison between Europe’s ideal competitiveness agenda (Part 5) and Europe’s actual initiatives (Part 6), we introduce a Competitiveness Transformation Scorecard. It evaluates each of the seven strategic pillars along three dimensions:

  • Ambition: the strength of Europe’s policy intent.

  • Execution Capacity: the ability to implement policies at scale and speed.

  • Competitiveness Impact: observed or expected improvements in Europe’s position.

Scores range from 1 (very weak) to 5 (strong).

Pillar

Ambition

Execution Capacity

Competitiveness Impact

Overall Gap

1. Strategic Industries

4

3

3

High

2. Capital Mobilisation

3

2

2

Very High

3. Pro-Speed Regulation

3

2

2

Very High

4. Energy & Infrastructure

4

2

2

Very High

5. Talent & Skills

3

2

2

High

6. Supply-Chain Resilience

4

3

3

Moderate

7. Governance & Execution

3

1

2

Very High

 Interpretation

  • Europe scores highest where political awareness is strongest (strategic industries, supply-chain resilience).

  • The largest gaps are in capital mobilisation, regulation, energy competitiveness, and governance — all essential to systemic change.

  • Ambition is not the problem; execution capacity is.

  • The scorecard reveals that Europe faces not a collection of isolated challenges but a coherent structural deficit.

This quantitative assessment makes clear why Europe must now move from strategy to coordinated action.

10. Call to Action: A Shared Responsibility for Europe’s Competitive Future

Europe’s competitiveness challenge is systemic, but not irreversible. The scorecard shows where the deficits lie — and therefore where action must be taken. No single institution or actor holds all the levers. A successful response requires coordinated responsibility across Europe’s political, institutional, industrial, and societal actors.

10.1 To the European Council: Elevate Competitiveness to a Continental Mission

  • Make competitiveness a top-tier strategic priority.
  • Ensure long-term continuity in industrial policy.
  • Expand qualified majority voting in economic security areas.
  • Approve EU-level financing at the scale required for transformation.

10.2 To the European Commission: Become a Builder, Not Only a Regulator

  • Establish an EU Industrial Delivery Unit.
  • Simplify regulation in strategic sectors.
  • Ensure transparent milestones for Chips Act, NZIA, and CRMA.
  • Reduce regulatory divergence across member states.

10.3 To Member States: Deliver the Foundations of Competitiveness

  • Align national policies with EU strategic objectives.
  • Reform permitting, skills systems, energy policy, and industrial zoning.
  • Accelerate infrastructure build-out.
  • Support cross-border industrial investment.

10.4 To Industry: Invest Decisively in Europe’s Future

  • Commit to scaling production and R&D in Europe.
  • Engage in public–private megaprojects.
  • Strengthen regional supply-chain ecosystems.
  • Advocate for policy changes while investing when improvements occur.

10.5 To Citizens: Support the Foundations of Prosperity and Autonomy

  • Recognise competitiveness as essential for jobs, welfare, and sovereignty.
  • Support needed infrastructure and industrial projects.
  • Embrace skilled migration where needed.
  • Engage constructively in debates on Europe’s economic future.

Conclusion: Europe Must Act Now

This series has shown that Europe understands its competitiveness challenge but has not yet mobilised the scale, speed, or coherence required for renewal. The next decade will determine whether Europe remains a global centre of prosperity and influence or becomes increasingly dependent on the industrial and technological power of others.

Competitiveness is no longer an economic issue alone.
It is Europe’s strategic imperative.

References

  1. European Commission. Annual Single Market and Competitiveness Report.

  2. European Court of Auditors. Special Reports on Industrial Policy Execution.

  3. IEA. Energy Market Reports.

  4. OECD. Science, Technology and Industry Outlook.

  5. Eurostat. Labour and Skills Indicators.

  6. European Parliament. Industrial Strategy and Economic Security Analyses.

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