On the digital front, the Draghi report misses the point.
Europe’s Competitiveness Lag: An Analysis of Draghi’s Report
In his report on European competitiveness, submitted to the European Commission in September 2024, Mario Draghi notes that per capita income has increased more in the United States than in Europe since the global financial crisis of 2008. The Old Continent, according to the former president of the European Central Bank, has indeed fallen behind America (and China) in the field of technology. This productivity gap results from chronic underinvestment: in 2021 alone, European companies spent 270 billion euros less on research and development than their American counterparts. Draghi therefore recommends that Europe increase its investments to 750 billion or even 800 billion euros per year (from approximately 4.4% to 4.7% of GDP).
However, Europe does not need investments for the sake of investing, but with a view to economic missions. If the objective lies in sustainable, inclusive and innovation-driven growth, then the role of the State should not only consist of restoring order in the markets, but also of shaping them. Under the leadership of an “entrepreneurial State,” the public sector can maximize the creation of public value by adopting a results-oriented approach, which directs investments towards clearly defined objectives. Rather than simply being a lender of last resort, it must become an early investor in strategic sectors.
Draghi also denounces the excess of regulation in Europe and suggests the creation of a new vice-president of the European Union, responsible for overseeing “simplification.” Unsurprisingly, the business world has welcomed this recommendation. However, Draghi’s message misses the point: intelligently designed, regulation can absolutely stimulate innovation.
Not Ambitious Enough
At the same time, the Draghi report barely mentions the public sector capabilities needed to implement the changes it recommends. These capabilities, which are an essential prerequisite, depend on the cumulative investments that the State makes over time. On this point, it is necessary for Europeans to pursue the opposite objective to that of the department of governmental efficiency promoted by Elon Musk in the United States.
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