The German office of PwC has released a report that looks at how the continent can both strengthen its economic competitiveness while achieving its climate targets.
According to the report, The EU’s Competitiveness Compass – How Europe Shapes Its Future, the three elements to achieve this will be closing the innovation gap, having a joint roadmap for decarbonisation and competitiveness, and reducing excessive dependencies while increasing security.
These in turn, wrote PwC, will be supposed by simplifying and reducing regulation, removing barriers in the single market, financing competitiveness through initiatives, promoting skills and quality jobs, and a better coordination of national and continent-wide policies.
PwC wrote: “Europe’s path to decarbonisation is undoubtedly complex but offers enormous opportunities for sustainable growth and innovation. Through strategic policy decisions and international co-operation, Europe can take a leading role in the global fight against climate change while maintaining its economic strength. It remains exciting to see how these ambitious plans will be realised and what positive changes they will bring.”
When it comes to closing the innovation gap, PwC said that while the number of global patents within Europe is roughly the same as in the US and China, only about a third of those registered are used commercially. This is because, it said, of market fragmentation, a lack of venture capital, and insufficient support for innovation. All of these, the financial services giant said, hinder the growth and scaling of startups within Europe.
It went on: “In order to improve these conditions, the EU is planning a start-up and scale-up strategy. The planned initiatives include increasing venture capital and supporting companies that invest in innovative technologies. Investments are also to be made in pioneering technologies such as artificial intelligence, semiconductors, quantum- and biotechnologies.”
PwC concludes: “Europe must strengthen its competitiveness in order to be successful in the global economy in the long term. The proposed strategy is based on a combination of industrial policy, investment, and reforms, all united around a common vision. The EU’s climate targets are retained, but the strategy for achieving them is adapted.”
The regulatory burden, wrote PwC, will be reduced by eliminating what it called ‘extensive reporting obligations’, with a focus instead on incentives and support programmes.
