Measuring transition to a competitive and sustainable economy

The transition to a competitive and sustainable economy is at the heart of EU strategies to achieve climate neutrality while increasing economic efficiency. An indicator to measure the competitive and sustainable transition at regional level is presented based on Santos et al. (2023). The indicator accounts for shifts in employment towards greener and more productive sectors over the 2008-2020 period. On average, the share of employment in more productive and greener sectors is increasing over time, although the impact of the Covid-19 crisis is tangible. There is strong heterogeneity across EU regions, but most of the less developed regions lag behind the more developed ones. However, on the dimension measuring competitiveness, the less developed regions perform better than the more developed ones. The opposite is true for the environmental sustainability dimension. This suggests that regions initially improve along the competitiveness dimension, and only afterwards are capable of concentrating on environmental sustainability.