Private Capital: The Key to Boosting European Competitiveness
It is the world’s third-largest economy and a leader in sustainability and social standards. Yet Europe has a competitiveness crisis. The GDP gap between the European Union and the United States nearly doubled to 30 percent between 2002 and 2023, with around 70 percent of the difference attributable to slower productivity growth. That has, in turn, suppressed income growth across Europe: Real disposable incomes have increased by almost twice as much for US households since 2000.
FAQ
Q: What are the key areas Europe should address to maintain its competitiveness?
A: Investing in innovation, talent, structural and regulatory enablers, and mobilizing additional investment from both private and public sources.
Q: How can private capital players contribute to closing Europe’s productivity gap?
A: By providing financial resources, operational expertise, driving innovation, and adopting cutting-edge technologies.
Conclusion
Europe stands at a critical juncture, needing to foster autonomy and self-sufficiency in strategically critical industries in the face of rising geopolitical tension. Private capital holds the key to unlocking Europe’s potential by driving innovation, creating European champions, and mobilizing the significant investments required. By aligning with the European Commission’s Competitiveness Compass and capitalizing on potential new favorable market dynamics, private capital can become a transformative force that fosters growth, sustainability, and resilience across the continent.
