On 29 January 2025, the European Commission presented its communication on a Competitiveness Compass for the European Union. Unlike a traditional compass, where the magnetic needle points towards the north pole, the Competitiveness Compass is a guideline for the EU to “reignite economic dynamism”, aka boost competitiveness and economic growth. To keep up with other superpowers, research and innovation are pushed as a solution for Europe to capitalise on – what does that mean for GÉANT and the NRENs?
A document like the Competitiveness Compass has long been expected in the Brussels ‘bubble’. Following Mario Draghi’s report on the challenges faced by European industry and companies, the new Compass is supposed to serve as a new roadmap along three strategic imperatives: (1) closing the innovation gap to the US and China, (2) decarbonising the economy, and (3) reducing excessive dependencies and increasing security. Despite Europe’s share of global patents being comparable to the US and China, and Europe’s long tradition of cutting-edge research and innovation, the continent struggles to commercialise its innovation at the same rate as other regions. To give a more comprehensive picture of what reignited competitiveness requires, the three strategic pillars are complemented by five horizontal enablers: (1) simplification, (2) removing Single Market barriers, (3) financing, (4) skills, and (5) better policy coordination.
The next Framework Programme
Research and innovation are funded by the Horizon Europe Programme – including GÉANT with the GN5 projects. Horizon Europe is the EU’s 9th iteration of the Framework Programme for Research and Technological Development (FP), a dedicated budget line out of the EU’s 7-year long-term budget (the MFF). For Horizon Europe, or FP9, the budget amounted to roughly €100 billion, making it the biggest public research investment program in the world. With the current MFF coming to an end in 2027, all the budget lines for the 2028-2034 MFF need to be re-negotiated, and as topics such as defence, dual use, and an overall weaker economy cumulate, fears for the existence and scope of a designated research budget line (FP10) have been rising.
Enter the Competitiveness Compass! It is the newest document in a long line of statements, speeches, and strategies putting competitiveness at the core of the solution for European prosperity. Naturally, the GÉANT community is especially interested in how research is talked about in the Commission’s communication. If research and innovation are so strategically important in boosting Europe’s economy, surely there is a reference to the next Framework Programme in there? Or a hint at the Heitor report, which recommended that the FP10 budget should be doubled (to ca. €220 billion) to ensure European research and innovation can keep pace with global technological advancements?
Surprisingly, the Compass does not mention the Heitor report and has no commitment to the next FP10. For now, at least, the fears around the research budget being swallowed up in a Competitiveness Fund were alleviated by Christian Ehler, a leading member of the European Parliament. Ehler called the Compass a brave approach, and highlights that such a focus on research and innovation has been unheard of in the last ten years. Some would argue that, despite this focus, the Compass reveals a purely instrumentalist view of research. Additionally, there are uncertainties about how the imperatives set out in the Competitiveness Compass will be implemented, both the three strategic imperatives and the five horizontal enablers. Solving the core issues of market fragmentation, the lack of risk capital, the constraints of regulation, and not enough innovation support overall is a mammoth task. To go about this, the Competitiveness Compass sets out flagship actions and announces when they can be expected.
How to: closing the innovation gap
The following actions falling under Pillar 1 are particularly interesting:
- A European Strategy for Research and Technology Infrastructures (Q3 2025): this will complement the EU Start-up and Scale-up Strategy (Q2 2025), to promote facilities to open up to start-ups and SMEs. The setting up of AI Factories and pilot lines for semiconductor product development were initial steps in this direction. This highlights the EU’s push for research and technology infrastructures to be closely aligned with businesses.
- A Digital Networks Act (Q4 2025): state-of-the-art infrastructure is key for the EU’s innovation goals. Modern fibre networks, wireless, satellite solutions, investments in 6G and cloud computing capabilities are indispensable to build the digital networks of the future. The Act is expected to push for improved EU spectrum coordination and create a Single Market for connectivity.
- A European Research Area (ERA) Act (2026): the long-preached goal of spending 3% of GDP annually on research and development was first set out in 2000. The new ERA Act will want to cement this commitment, reinforce coordination between the EU and Member States’ funding priorities, and focus research support on strategic priorities.
Looking into the future
The Competitiveness Compass transparently sets out what the EU wants to achieve to close the innovation gap. The EU has a strong research base, and in the EC’s attempt to translate this into market applications, it should not accidentally fiddle with aspects of the European research landscape that are not broken. Stifling flexibility and the passionate tinkering that is inherent to science and innovation is not the way forward, and forgetting about the invisible parts of the landscape supporting research would be detrimental.
The Competitiveness Compass is the first major strategic initiative of the 2024-2029 mandate of the new Commission, in office since 1 December 2024. As the direction set by the Compass trickles down to a more tangible level – it is already reinforced in the European Commission’s 2025 Work Programme – the long-term impact of the Compass will become clearer. We will keep following the developments and informing the community.
This article was written in WP2T4 of the GN5-2 project. It is the first in a series of regular monthly columns.
