The European Commission’s recent report, “The Future of European Competitiveness — Part A,” published on 9 September, provides a comprehensive analysis of the challenges and opportunities shaping the EU’s economic landscape. While the report covers a broad spectrum of issues, the transport sector emerges as a key area of focus, underpinning many of the strategic themes that are critical for Europe’s future growth and competitiveness. ERTICO welcomes this comprehensive analysis of the European landscape and remains committed to actively collaborating with European institutions to foster a competitive environment for ITS and ongoing developments in innovation for transport’s future.
One of the central findings is Europe’s lag in technological advancement. The report highlights that Europe has fallen behind the other region’s in developing and deploying key technologies, particularly in digital and emerging sectors. This technological gap is a significant factor contributing to the productivity disparity.
The report outlines three critical areas for action:
- Innovation: Europe needs to close the innovation gap, especially in advanced technologies. The current industrial structure in Europe is static, and the innovation pipeline is hindered by regulatory and financial inefficiencies.
- Decarbonisation: A coherent plan is essential to ensure that decarbonisation efforts align with competitiveness. Although Europe leads in clean technologies, high energy costs and competition from countries like China pose significant challenges.
- Security and Dependencies: It is crucial to enhance security and reduce dependencies on critical raw materials and digital technologies. Europe’s reliance on a few suppliers and increasing geopolitical risks could threaten its growth and freedom.
Bridging the Productivity Gap
The report highlights Europe’s struggle with slow growth, emphasising a widening gap in GDP compared to the United States. This disparity is primarily attributed to slower productivity growth, which has also affected living standards. In the transport sector, productivity is crucial for efficiency, cost-effectiveness, and the overall competitiveness of the European economy.
To address this, the report suggests that Europe must accelerate its adoption of digital and emerging technologies, particularly in transport and logistics. Advanced digital solutions such as the Internet of Things (IoT), Artificial Intelligence (AI), and data analytics can optimise supply chains, improve traffic management, and reduce congestion, thereby boosting productivity. By integrating these technologies, the transport sector can become a driving force in narrowing the productivity gap and supporting broader economic growth.
Transport and Innovation
The report stresses the need to accelerate innovation in the transport sector to bridge the productivity gap between the United States and China. It highlights that the EU has been slower in adopting advanced technologies and the adoption of next-generation transport solutions, such as autonomous vehicles, smart infrastructure, and advanced public transport systems, is imperative. These innovations can significantly reduce costs, enhance safety, and improve the environmental footprint of European transport networks. However, the current industrial structure and regulatory environment are seen as obstacles to rapid innovation. To overcome this, the report advocates for streamlined regulations and increased investment in research and development to foster a dynamic and adaptive transport ecosystem.
Decarbonisation and Competitiveness
The transport sector plays a pivotal role in Europe’s decarbonisation efforts. As the report highlights, achieving a balance between decarbonisation and competitiveness is critical, including the importance of transitioning to cleaner technologies, such as electric vehicles and hydrogen fuel cells, to achieve the EU’s climate goals. The report also advocates for the development of comprehensive infrastructure, such as charging networks and hydrogen refuelling stations, to support the widespread adoption of low-emission transport technologies.
To maintain its leadership in green transport technologies, Europe must invest in infrastructure that supports the widespread adoption of clean energy solutions, such as charging networks for electric vehicles and hydrogen refuelling stations. Additionally, aligning decarbonisation policies with industrial growth strategies can ensure that the transition to a low-carbon transport system does not compromise economic competitiveness.
Security and Resilience in Transport
The report highlights the need for Europe to reduce its dependencies on critical raw materials and technologies, especially in the transport sector. It warns that over-reliance on external suppliers for essential components, such as batteries and digital technologies, could pose risks to the EU’s economic security. The report calls for the diversification of supply chains and increased investment in domestic production capacities to enhance resilience and ensure that the transport sector can withstand geopolitical and economic disruptions.
The report underscores the importance of enhancing security and reducing dependencies on critical raw materials and digital technologies. This is particularly pertinent for the transport sector, where disruptions in supply chains or technological dependencies can have far-reaching consequences.
Building a resilient transport network that can withstand geopolitical and economic shocks is essential. This includes diversifying supply chains, securing access to critical materials for vehicle production, and developing robust cybersecurity frameworks to protect digital transport infrastructures. By reducing dependencies and enhancing security, Europe can safeguard its transport sector and, by extension, its economic stability and growth.
A Unified Strategy for the Future
The Commission’s report calls for a unified strategy that integrates transport policies with broader economic and industrial policies. This includes revising regulatory frameworks, enhancing collaboration between the EU and member states, and investing in sustainable infrastructure. By focusing on these areas, the EU can ensure that its transport sector supports economic growth and contributes to a more resilient and sustainable future.
For the transport sector, creating an integrated policy framework would support innovation, decarbonisation, and resilience. Enhanced cooperation between industry stakeholders, policymakers, and research institutions will be key to developing a cohesive transport strategy that aligns with Europe’s broader economic goals. By focusing on transport as a central pillar of its competitiveness strategy, Europe aims to build a more productive, sustainable, and resilient economy.
In conclusion, as the Commission’s report points out, the challenges of slow productivity growth, technological lag, and the need for decarbonisation will continue to require concerted effort. By prioritising innovation, security, and sustainability in transport, Europe can pave the way for a prosperous and competitive future.
Access the full report here.
Source: European Commission
