The EU needs to increase its investment by 4.7% of GDP (800,000 million euros per year) to close the growing gap with the United States and China in innovation, digitalization and energy transition. This is highlighted by Qaracter, in its latest analysis of the Draghi report, a study by the European Commission.
The analysis highlights that the European GDP gap compared to the US has gone from 15% to 30% in the last 20 years, reflecting a loss of economic dynamism against its main competitors. While the United States has grown by 72% since 2007, the European Union has only advanced 21% in the same period. For its part, China has experienced a 270%growth, consolidating itself as the largest economic rival of the European bloc.
Europe loses competitiveness
This study identifies five major structural obstacles that prevent the EU from competing on equal terms with other powers:
- Lack of investment in R&D: United States and China exceed the EU in innovation. In 2023, the seven great American technology invested 200,000 million dollars in R&D, equivalent to 50% of all public and private R&D investment of the EU.
- Non -sustainable energy dependence: The EU continues to depend on energy imports, which makes its production more expensive and affects its competitiveness. While China allocated 300,000 million dollars in energy subsidies in 2023 to reduce business and domestic costs, Europe faces much higher electricity prices.
- Fragmented single market: Disgust national regulations make business expansion difficult and limit the attraction of foreign investment. Only 25% of large European companies make cross -border sales online, compared to 50% in the US.
Qaracter presents analysis of the Draghi report: the EU needs to increase its investment to close the gap with the US and China
- Private investment deficit: To recover its competitiveness, Europe needs to raise its investment rate from 22% to 27% of GDP in the next decade.
- Digital Gap: Inequality in technological infrastructure between European countries and regions slows economic transformation and reduces productivity.
Qaracter highlights the road map to transform the European economy
To deal with these challenges, and in accordance with the Draghi report, Qaracter supports an investment strategy focused on three key areas:
- Digital transformation: Creation of a European Digitalization Fund to modernize companies, boost technological entrepreneurship and display 5G infrastructure and optical fiber throughout the EU.
- Energy Independence: The EU must accelerate the transition to renewable energies, increase its energy storage capacity and diversify its supply sources. The objective is that by 2030, at least 50% of European energy consumption comes from clean sources.
- Regulatory simplification: Unify regulations to eliminate bureaucratic barriers and facilitate investment. Currently, access to financing for startups in the EU is three times less than in the US, which limits the growth of innovative companies.
