ERRIN Strategic Cluster kick-off meeting highlights the importance of regional innovation ecosystems in shaping EU competitiveness

On 11 February, the ERRIN Strategic Cluster launched its 2025 activities with a kick-off meeting with a focus on enhancing European competitiveness and resilience. The event brought together European Commission representatives and regional and local stakeholders to discuss how strengthening regional ecosystems can be key to driving research and innovation and competitiveness across Europe and gave an overview of the Competitiveness Compass, the European Commission's new framework to drive Europe’s economic growth. The event also introduced ERRIN's workstream on competitiveness, which aims to explore how ERRIN members can best contribute to this new Commission priority.

Opening the meeting, Pirita Lindholm, ERRIN Director, emphasised the critical role of local innovation ecosystems in fostering Europe's competitive edge. She noted that while the Draghi Report has placed R&I at the heart of EU policymaking, Europe still faces challenges due to fragmented innovation landscapes and limited regional connectivity. Strengthening regional ecosystems will be key to unlocking Europe’s full innovation potential.

Stefano Grassi from DG Secretariat General, European Commission, highlighted knowledge, capital and market access as key barriers for innovation. To address these, he emphasised the need for the activation of a virtuous innovation cycle – one where regions are well placed to contribute for example through public procurement, education, upskilling and reskilling and providing a support ecosystem to SMEs.

Elaborating on the fragmentation of the EU's innovation ecosystem, Alexandr Hobza, from the European Commission's Cabinet of Executive Vice-President Stéphane Séjourné, presented data showing that while the EU is improving its innovation performance, it still lags behind global competitors like the US and China. A major gap identified is the lack of private investment in Europe, particularly in the scaling-up phase of start-ups. In contrast to the US, where the financial market is more unified, Europe's capital remains fragmented across 27 member states, hindering the growth potential of innovative businesses.

A focal point of the meeting was the Competitiveness Compass, a strategic framework designed to enhance EU economic resilience by pinpointing key areas for growth, investment and policy coordination and outlines the EU's strategic roadmap from 2025 to 2026. The Compass translates the three imperatives of the Draghi Report on European Competitiveness into concrete actions.

The objective was to get a clear understanding of what role regions can play in all these proposals and how ERRIN can influence the work going forward from a regional perspective. Discussions followed on how these upcoming proposals will feature in ERRIN's activities this year. Many initiatives such as the European Innovation Act and ERA Act are already featured. Others, such as the Start-up and Scale-Up Strategy and 28th regime will be further explored by ERRIN's Strategic Cluster.

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.

Have your say on the next EU long-term budget

The meeting concluded with a strong call for enhanced regional participation in shaping the next Multiannual Financial Framework (MFF). The European Commission has just launched a public consultation on the next MFF, open from February 12 to 7 May. This is a crucial opportunity for ERRIN members to contribute to shaping the future of EU funding, ensuring that a place-based perspective is well represented. Learn more on how to participate in the consultation here.

The next MFF and this topic will be at the heart of ERRIN’s Strategic Cluster activities in 2025 and will continue to monitor policy developments, including its competitiveness initiatives, engage with EU institutions and support members in shaping the EU's long-term budget.