This debate examined how the European Commission is responding to the innovation and competitiveness challenges identified in the Draghi report, focusing on structural bottlenecks, regulatory frameworks, and alternative models for innovation governance.
The debate brought together academic and policy perspectives to assess Europe’s capacity to foster innovation in an increasingly competitive global environment.
Building on the diagnosis of the Draghi report, the discussion explored whether the European Union has made tangible progress in addressing long-standing structural constraints, including market fragmentation, regulatory complexity, and limited scalability for innovative firms.
A central question was whether these challenges can be effectively tackled within the existing EU-27 framework or whether new institutional and legal mechanisms are required.
Particular attention was devoted to the proposal of a 28th regime, currently under consideration by the European Commission, as a potential tool to create a more integrated and innovation-friendly regulatory environment across Member States. The debate assessed its feasibility, added value, and possible limitations.
The discussion also examined Europe’s strategic positioning in global innovation competition, addressing whether the EU should pursue differentiation—leveraging its regulatory model and values—or engage in direct competition with leading innovation ecosystems such as the United States and China.
Finally, the session explored more forward-looking and unconventional approaches to innovation governance, including proposals outlined in the 'Constitution of Innovation', such as the creation of specialised legal frameworks or institutional arrangements designed to accelerate innovation and reduce regulatory barriers.
This initiative is part of the EUI Science for Policy Interface.
Key takeaways
· The priority for Europe is to relax national or European rules that limit entrepreneurs’ ability to build, grow, and scale.
· A degree of consolidation is needed in digital industries, where size correlates with prosperity.
· Small firms create innovation, large firms diffuse innovation. Europe lacks large firms more than it lacks small firms.
· Some mistakes were made when we disallowed the consolidation of European stock exchanges, which supply deep and liquid money markets.
· Europe has some upcoming champions in AI, Quantum, and other technological sectors: it’s important to focus policy efforts on supporting their growth.