On 29 January the European Commission presented the Competitiveness Compass, the first major initiative of this mandate providing a strategic framework to steer the Commission's work.

The Competitiveness Compass establishes competitiveness as one of the EU’s overarching principles for action. The Compass sets a path for Europe to become the place where future technologies, services, and clean products are invented, manufactured, and put on the market, while being the first continent to become climate-neutral. It argues that Europe can only match its continent-sized competitors if EU and national policies are aligned around the same objectives and reinforce each other.

The Compass is composed of three transformational imperatives to boost competitiveness and five horizontal enablers necessary to underpin competitiveness across all sectors.

The three pillars are:

• Closing the innovation gap
• A joint roadmap for decarbonisation and competitiveness
• Reducing excessive dependencies and increasing security

The five horizontal enablers include:

• Simplification
• Removing barriers in the Single Market
• Financing
• Skills and quality jobs
• Better coordination

Outline of the key proposals under EU's Competitiveness Compass

1. Closing the innovation gap

The Competitiveness Compass sets out several measures to address the fragmentation of its innovation ecosystem, including:

• Simplifications to assist small and mid-sized enterprises and introduce initiatives to foster business growth, such as the Start-up and Scale-Up Strategy (Q2 2025).
• The AI Factories Initiative to enhance AI-driven manufacturing and the "Apply AI" initiative (Q1 2025), aimed at helping large industries adopt emerging technologies like artificial intelligence (AI) and robotics.
• The European Innovation Act (Q4 2025 – Q1 2026) to promote access to research infrastructures and intellectual property created through EU-funded R&I.
• European Research Area Act (2026) to strengthen regional R&I collaboration and make research careers more attractive across the EU.
• Advanced Materials Act (2026) to establish a framework to support the development and commercialisation of next-generation materials.
• Quantum Act (Q4 2025) to strengthen European leadership in quantum computing and deep tech.
• Digital Networks Act (Q4 2025) to enhance digital connectivity.
• A 28th legal regime (Q4 2025 – Q1 2026), to simplify applicable rules and reduce the cost of failure.

2. A Joint Roadmap for decarbonisation and competitiveness

Recognising the need to balance economic growth with climate goals, the Competitiveness Compass outlines a strategy to reduce carbon emissions while maintaining industrial competitiveness. Key measures include:

• The Clean Industrial Deal (Q1 2025), designed to support energy-intensive industries in their transition to low-carbon technologies.
• An Affordable Energy Action Plan (Q1 025) to lower energy costs for businesses and improve access to clean energy.
• The Sustainable Transport Investment Plan (Q3 2025) will promote infrastructure for electric mobility, rail and clean fuels.
• A new flexible State Aid Framework (Q2 2025), to support companies in their efforts to switch to clean technologies.
• A Circular Economy Act (2026) to strengthen resource efficiency and waste-reduction measures to boost industrial competitiveness.

3. Reducing Dependencies and Enhancing Security

The EU’s economic resilience depends on strengthening supply chains and reducing reliance on external markets for critical raw materials and technologies. Key measures include:

• A joint Purchasing Platform for Critical Raw Materials (Q2-3 2025) to establish a centralised procurement mechanism for rare earth metals and essential minerals.
• A review of EU public procurement rules (2026), introducing a European preference for strategic sectors and technologies.

Find the European Commission's Communication of the Competitiveness Compass here to learn more about all of the planned actions under the Compass.

The official press release of the Commission can be found here and the full document here.

The factsheet can be found here.

On 11 February from 10:00-12:00, the ERRIN Strategic Cluster kick-off meeting will take place, to offer an overview of Commission's initiatives to ensure Europe's competitiveness from a regional perspective, including the Competitiveness Compass. The event will be held in person at the ERRIN premises. ERRIN members may learn more and register here.