Europe’s environmental transition and competitiveness

Europe’s growth over the past decades has functioned as a mechanism fully integrated with the global economy. This third chapter addresses the issues and challenges of the competitiveness of the European economy and its ability to exploit the opportunities offered by the twin environmental and digital transitions. The transition is expected to bring a massive shift in investment and production towards low-carbon sectors and technologies. In the European case, such conversion is difficult, as it must contribute to halting and reversing a process of deindustrialization that is threatening important parts of the European manufacturing base. This, in turn, requires the EU to develop an array of policies, primarily industrial, technological, and competition policies, and to introduce implementing tools for a new industrial policy that links innovation, technology, and competitiveness. The aim must not be to achieve production and/or technological autonomy but rather to create an innovative and competitive ecosystem that is able to promote top-flight European companies in high value-added segments.