EU Targets AI, Biotech, and Clean Energy in Competitiveness Drive

The European Union is set to launch a major initiative to enhance its global competitiveness by focusing on AI, biotechnology, and affordable clean energy. According to a draft European Commission paper obtained by Reuters, the bloc aims to close the gap with global rivals like the United States and China while responding to calls for reduced regulatory burdens.

The initiative, outlined in the draft “Competitiveness Compass,” proposes 29 measures to be implemented over the next two years. The strategies focus on fostering innovation, decarbonizing manufacturing, and ensuring the EU remains a key player in emerging technologies.

“Without an urgent shift in gear and approach, the EU’s future as an economic powerhouse, an investment destination, and a manufacturing center is at stake,” the draft warns.

Addressing Global Pressures

The EU’s move comes amid increasing pressure from member states like France to streamline regulations and enhance business operations. The bloc also faces external challenges from the United States, where President Donald Trump has pushed for deregulation and threatened tariffs on European exports.

At the World Economic Forum in Davos, Trump called on the EU to reduce its regulatory constraints, further intensifying the competitive landscape. To maintain its standing, the EU plans to lead in technologies critical to tomorrow’s economy, including advanced materials, robotics, space exploration, and the manufacturing of essential medicines.

The draft also highlights the need for coordinated industrial policies and large-scale investments, echoing recommendations from a 2023 report by former European Central Bank chief Mario Draghi.

Clean Energy and Industrial Innovation

As part of its efforts, the Commission is set to unveil its Clean Industrial Deal in February. Key proposals include reducing energy prices — currently three times higher than in the U.S. — and cutting corporate sustainability reporting requirements by 25%.

The initiative also aims to promote AI-driven factories, simplify EU chemical regulations, and support innovative startups in scaling their operations.

The paper emphasizes the importance of integrating energy grids, digital infrastructure, and AI development across the EU’s 27 member states. This coordinated approach aims to reduce the fragmented nature of current policies, paving the way for a more unified and competitive industrial strategy.

France’s Push for Simplification

France has been a vocal advocate for reducing regulatory burdens at the EU level. In a document dated January 20, France proposed delaying or indefinitely pausing new regulations, including those related to corporate sustainability reporting.

“We must focus on the bills that complicate the life of our companies and slow down their growth,” said French Finance Minister Eric Lombard, who highlighted the need for a “simplification shock” to help European businesses compete with faster-growing U.S. and Chinese rivals.

Germany has expressed similar sentiments, underscoring a shared desire among EU member states to prioritize policies that bolster growth and reduce administrative hurdles.

Looking Ahead

The EU’s Competitiveness Compass represents a decisive step toward solidifying its global position in critical industries.