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The EU’s action plan to remain competitive

The EU has three main areas for action if it is to increase competitiveness in a global economy over the next five years, according to the Draghi Report. We look at what its findings mean for the food manufacturing and retail industry.

The EU Draghi Report, published last month, looks at the future of European competitiveness, exploring the challenges experienced by the European sector and businesses in the single market. Its recommendations will direct the EU’s direction for the next five years.

Hailed as a landmark exploration of the EU market, the 400-page report urges immediate funds and reforms to salvage Europe’s economic health and bridge the market’s gap with other global giants, the US and China. According to the report, the minimum investment sum required for this economic boost is €750-800 billion.

The report was penned by Mario Draghi, former European Central Bank President and, according to the European Commission, one of Europe's great economic minds and outlines his personal vision on the future of European competitiveness.

Three key areas for action

The report identifies three main areas for action.

“The first is aiming at closing the innovation gap with the United States and China. EU companies spent around €270 billion less on R&D than their US counterparts in 2021, largely because we have a static industrial structure dominated by the same companies and technologies as decades ago,” said Draghi in an address to the EU at the launch of the report.”

The second area for action is a joint plan for decarbonisation and competitiveness. “If Europe’s ambitious climate targets are matched by a coherent plan to achieve them, decarbonisation will be an opportunity for Europe. But if we fail to coordinate our policies, there is a risk that it could run contrary to competitiveness – and ultimately be delayed or even rejected,” said Draghi.

The third area for action is increasing security and reducing dependencies on foreign raw materials.

So, what does this mean for the food industry?

Looking beyond the proposed multi-billion investment needed to tackle the EU’s competitiveness are reform areas and actions to push the needle. With these, the aim is that Europe can achieve sustainable growth and competitiveness.

Following the report’s release, decarbonisation, strategic economic security, innovation, energy independence and defence are all leading priorities on the EU agenda. Within the first 100 days of the new European Commission’s mandate, a new Clean Industrial Deal will be presented for competitive industries.

Retailers, wholesalers and manufacturers

Retailers and wholesalers comprise the largest service sector, accounting for 10% of the EU’s gross domestic product (GDP). They are the primary private employer in Europe, offering employment to 26 million Europeans.

EU food shoppers now benefit from numerous innovations that have become commonplace, including food safety apps, environmentally-considerate food, e-commerce and convenient delivery options.

“We welcome the clear focus on investment, the energy, sustainability and technological transition, better quality legislation and the single market,” says Christel Delberghe, director-general of EuroCommerce, the trade association representing Europe’s retailers and wholesalers. “But, any effective EU competitiveness strategy needs to look beyond manufacturing and recognise the contribution of services,” Delberghe added.

The Draghi report acknowledges that the sector surpasses the US in mid-technology industries. Retail and wholesale are important for Europe’s competitiveness and have the potential to contribute even more.

“Retailers and wholesalers provide huge potential to scale up green and digital innovation,” Delberghe said. “We must also look beyond our borders and support diversification of global supply chains that help us remain both resilient and globally competitive.”