The European Commission’s recently published Competitiveness Compass lays out an ambitious plan to strengthen the EU’s economic position, to transform recommendations from Mario Draghi’s report on the future of the Single Market into action for the next five years.

Europe boasts a strong Single Market, skilled workforce, and world-class infrastructure, but in an increasingly competitive world, more must be done to stay ahead. The Compass sets a path for the EU to lead in future technologies and clean innovation while securing climate neutrality.

The Compass identifies 3 core areas of action with major opportunities for SMEs:

• Innovation: Closing the innovation gap by fostering an environment where start-ups and industrial leadership are in high-growth sectors and promoting the diffusion of technologies. For example, the Commission will propose ‘AI Gigafactories' and ‘Apply AI' initiatives to drive the industrial adoption of AI in key sectors.

• Decarbonisation & Competitiveness: The Compass identifies high and volatile energy prices as a key challenge and sets out areas for intervention to facilitate access to clean, affordable energy. Initiatives such as the Affordable Energy Action Plan and the Clean Industrial Deal set out a competitiveness-driven approach to decarbonisation.

• Security and resilience: reducing EU dependencies and increasing its resilience by building international Clean Trade and Investment Partnerships to secure raw materials, clean energy, and cleantech. The Commission will also review public procurement rules to introduce a European preference in public procurement for critical sectors and technologies.

Five cross-cutting actions have been identified, which have the potential to support and encourage European SMEs to contribute to European competitiveness:
• Reducing and simplifying the regulatory and administrative burden on firms. 
• Lowering barriers to the Single Market through its Horizon Single Market Strategy 
• Financing competitiveness by establishing a European Savings and Investment Union
• Upskilling and promoting quality jobs through a Union of Skills 
• Better coordination of policies at EU and national level by introducing a Competitiveness Coordination Tool 

Learn more about the European Commission's plans for sustainable prosperity and competitiveness in Europe.