
Competitiveness Compass
Which priorities have the European Commission set for their first major initiative?
HS – 02/2025
The European Commission presented its "Competitiveness Compass" as a strategic framework for increasing Europe's competitiveness on 29 January. This compass is based on the Draghi Report, which covers the same topic, and it is intended to be the guiding principles that will be used throughout the entire legislative period. This is why the European Commission’s communication lists flagship initiatives centered around three priorities and five horizontal factors.
Three priorities and five horizontal factors
The three priorities follow the Draghi report and aim to close the innovation gap, develop a common roadmap for decarbonisation as well as reducing dependencies. Accordingly, the European Commission’s Compass communication includes a range of initiatives applicable to the sectors covered by these priorities. In addition to the three priorities, the Commission has also defined five horizontal factors that will be crucial for strengthening competitiveness in all sectors as they also involve coordination, financing and simplification.
Innovation and supply reliability in the healthcare sector
A new biotechnology law is to be presented in the health sector that will promote innovation in the evaluating health technologies and clinical studies sectors. The planned "Critical Medicines Act" is also intended to reduce dependencies and strengthen the supply reliability of critical medicines. Simplification is also an issue here. Following the model of the proposed EU pharmaceutical reform, the European Commission also wants to make regulatory adjustments and streamline processes with regard to the availability and certification of medical devices.
Simplifying industrial safety measures
The European Commission also wants to implement simplifying industrial safety measures based on a dialogue to be held with interest groups, for example with regard to the REACH Regulation, which regulates the authorisation, registration, restriction and evaluation of chemical substances. The revision of this regulation is intended to simplify matters and ensure faster decision-making in relation to major hazards as well as competitiveness, safety, security and sustainability.
Digitisation and AI for greater competitiveness
Digital tools and Artificial Intelligence (AI) will also be used as part of the simplification process, both in businesses as well as public authorities. For example, reporting should be converted to digital formats wherever possible. Cross-border interoperability of applications used by public authorities must be guaranteed. By building on the EU's eIDAS framework, the EU-ID wallet is designed to enable seamless interaction between businesses and public administrations.
Modernisation of social protection systems
The European Commission stated in its communication that the working world is changing. Therefore, employees now need opportunities to adapt in order to keep their jobs or find new ones. The European Semester is intended to encourage the member states to modernise their social protection systems in order to provide them with reliable protection during this transition period. Pension reforms should also be coupled with initiatives to increase the employment of older people in order to promote greater participation in the labour market.