Untapping regional potential: the key to a Europe-wide industrial modernisation

Europe’s long-term competitiveness and industrial modernisation face a major challenge: fragmentation. Current policy debates overlook the potential and strengths of all EU regions for innovation and competitiveness.  

How can Europe stay competitive when the focus is primarily on the already technologically–advanced regions in Western and Northern Europe? Currently, 80% of patents for key green and digital transition technologies are concentrated in just a few of these more developed areas. 

Less developed regions also hold the potential to become future technology hubs, thereby boosting Europe’s overall competitiveness and cohesion. To unlock this potential, Europe needs a unified approach—one that prepares all its regions to be fit for the future. 

This short paper describes four key reasons why a unified approach is essential for Europe’s long-term competitiveness – and makes subsequent policy recommendations: 

1. The economic potential of regions remains untapped, hindering competitiveness.   
2. Unlocking the renewable energy potential of the whole EU can speed-up industrial modernisation.   
3. A two-speed Europe threatens the financial and economic stability of EU countries.     
4. Regional economic disparities can fuel support for far-right populist movements.