The European Commission’s leaked Competitiveness Compass promises an “unprecedented simplification” of EU rules to promote economic growth and competitiveness following wake-up calls from business leaders, two former prime ministers and recent elections.  

The report indicates that the EU executive intends to take an axe to red tape and do more to help ailing businesses.  

It says the EU “must restart a virtuous innovation cycle and remedy where it falls short relative to more dynamic competitors.”  

The role of patents and standards 

That includes addressing deficiencies related to patents and standards, two key drivers of innovation, economic growth and competitiveness that have long concerned the members of IP Europe.   

The leaked report says only one-third of EU patents are commercially exploited. “For European researchers and entrepreneurs, the route from discovery and patenting to market is littered with barriers,” the report says.  

It also says “Europe needs to be at the forefront of innovation in tech sectors that will matter in tomorrow’s economy” – and that participating in the development of global standards is part of the solution.  

“Engaging systematically in global standard setting processes is very important to influence outcomes aligned with EU interests, helping industry to maintain competitive positions in key technology markets, such as 5G and 6G telecommunications, AI, renewable energy technologies, electric vehicle charging infrastructure, and the Internet of Things,” the report says.  

Strategic vulnerabilities  

The starting point for the Commission’s awakening is that the EU’s growth and competitiveness have fallen behind those of other major economies. The EU has also become overly dependent on other regions for certain “strategic inputs”. That makes it more vulnerable to external shocks. It cited both the Letta report and Draghi report, both of which were wake-up calls.  

“In a global system where geopolitical tensions, competition for technological supremacy, and the scramble for control over resources are on the rise, Europe’s freedom, security and autonomy depend more than ever on its ability to innovate, compete, and grow,” the report says.  

It also says the EU “must guarantee its industrial presence in key technological sectors and mitigate risks for its security and economic resilience.”  

The report invites other EU institutions and social partners to endorse the Competitiveness Compass and to actively contribute to delivering its recommendations. 

IP Europe fully supports the Commission’s goal of reducing red-tape and complexity. We believe its proposed Regulation on Standard-Essential Patents is a perfect example of a regulation that is not needed, which will not achieve the intended goals, and would undermine European innovation, growth and competitiveness if it is adopted. We urge the Commission to re-consider the initiative in light of the recommendations of the Competitiveness Compass.