Competitiveness is the most hotly debated topic in Europe right now. The EU Competitiveness Compass is to set the direction on how to drive new economic dynamism across the continent and secure Europe’s leadership in a rapidly evolving global economy.
In our latest #TechTalk, we sat down with Fredrik Erixon, the Co-Founder and Director of the European Center for International Political Economy to explore the biggest opportunities and challenges when it comes to reigniting Europe’s innovation engine.
In the episode, Erixon explains why the pace of technology adoption is vital for competitiveness. He argues that long-term economic growth and societal prosperity depend on technological change to fuel productivity growth. Diffusing the latest technological advancements as quickly and widely as possible is essential to staying ahead.
One of the key issues to resolve, according to Erixon, is the completion of Europe’s integrated services market to ease the diffusion of frontier technologies to small and medium-sized enterprises (SMEs). Given the disproportionate number of SMEs in Europe, only by breaking down these barriers would the EU be able to achieve productivity growth rates like those in the United States.
He also stressed the need to create favorable framework conditions for encouraging investments, technology adoption and experimentation. Including reducing bureaucracy and pursuing a balanced approach to regulation that does not put Europe at a disadvantage compared to other regions, hindering its ability to catch up and lead in tech-intensive sectors. “The pace of change is tremendously important, because if you’re not moving at the same speed as others, the likelihood that you’re going to become even further behind where the frontier countries are gets actually even bigger,” he said.
Human capital plays a pivotal role in technology diffusion and competitiveness. Erixon underscores the importance of retaining top researchers and graduates in Europe by providing better conditions and incentives. He also advocates for larger R&D investments in universities and basic training to equip individuals with the skills needed to leverage new technologies, including AI.
Looking ahead, he urges Europe to focus on emerging technologies such as quantum computing, biotechnology, and clean tech, rather than trying to compete in established markets. By allocating resources to define the future of these technologies, Europe can position itself as a leader in the next wave of technological advancement.
Watch the full #TechTalk with Fredrik Erixon here.