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As the World Economic Forum 2025 unfolded in Davos, a recurring theme dominated the discussions: Europe’s position in an increasingly polarised and competitive global landscape.
At an exclusive Davos roundtable hosted by Massimo Andolina, European CEO of Philip Morris International (PMI), and Claus Strunz, CEO of Euronews, this theme was central to a candid discussion among prominent public and private sector leaders.
The high-level discussion, moderated by CEO of World Minds, Christoph Keese, highlighted the need for Europe to become more competitive, innovative and united amidst an increasingly fragmented geopolitical landscape and rising uncertainty for EU-US relations following Donald Trump’s return to the White House.
Among those seated at the roundtable were key figures from across the European Union including the President of the European Council, Charles Michel, Romania’s Minister of Economy, Ivan Bogdan and Deputy General of the European Space Agency, Josef Aschbacher.
Representing the private sector alongside Andolina, were a broad range of business leaders across technology, media and strategic sectors, including the Senior Vice President at Huawei Europe, Fredrikson Kenneth, and Chief Economist at Active Owners Denmark, Bo Sandberg.
The challenges facing Europe
To kick off the roundtable, participants highlighted the stark challenges facing Europe in a changing global landscape, citing sluggish economic growth, multilateral fragmentation and an inability to compete with the innovation engines of the United States and China.
The discussion also touched on domestic political instability in major EU economies, such as Germany and France, and the rise of populist movements, which have further complicated efforts to craft a unified European strategy.
In reference to Trump’s “America First” policies and his pursuit of a “Golden Era” for the US, Andolina posed the same question for Europe: “What do we collectively need to do together – Brussels, the public and the private sector – in order to build the Golden Era for Europe?”
The Draghi Report: a wake-up call
A key reference point for the discussion was the Draghi Report (The Future of European Competitiveness – A Competitiveness Strategy for Europe), authored by Mario Draghi, former President of the European Central Bank and Italian Prime Minister. Presented to the European Commission in September 2024, the report outlines a bold plan to address Europe’s economic stagnation and declining global influence.
The 69-page main report offers stark insight into the future of European competitiveness. Key statistics highlight that the EU is growing 30 per cent slower than the United States, while China now directly competes with eurozone firms in nearly 40 per cent of sectors, up from 25 per cent in 2002. Mounting geopolitical tensions have also been shown to exacerbate Europe’s slow trade growth, an area which accounts for nearly 45 per cent of Europe’s GDP.
The report urges swift action to mitigate these trends, recommending a “far more coordinated industrial policy, more rapid decisions and massive investment if it wants to keep pace economically with rivals the United States and China.”
If Europe is to avoid “sleepwalking into catastrophe”, Andolina warned during the discussion – “catastrophe for jobs, for competitiveness and for economy” – EU leaders need to see the Draghi report as “a wake-up call” and drive forward bold reforms.
To do this, Andolina encourages EU leaders and policymakers to lean more on Europe’s strengths. “[We need to remember] what made us strong in the first place; the ingenuity of our people, our ability to innovate and our ability to embrace innovation rather than oppressing it with narrow-minded regulation and blocks.”
Calls for urgent policy reform
Both public and private sector voices spoke up about the stifling effects of Europe’s regulatory environment on growth and innovation, particularly in AI and digital markets.
Former European Council President, Charles Michel, defined the EU landscape as one of suspicion and urged reform. “We should talk less and act more in Europe,” he said, sharing his belief that Europe is regulating in a way that no longer works.
“A shift in mindset is crucial,” Andolina stressed, further emphasising the need to reimagine regulatory frameworks on industrial policy and foster an environment where businesses can thrive. Other participants mirrored this sentiment, calling for decisive action and collaboration among member states to secure a competitive future for Europe on the global stage.
Raising investment and shifting mindset
According to the Draghi report, “EU companies spent around €270 billion less on R&D than their US counterparts, causing Europe to lag behind in innovation and competitiveness, particularly in strategic sectors. To tackle this, the report proposes an annual investment of €800 billion, equivalent to 4.7 per cent of Europe’s GDP, to stimulate growth and competitiveness,
To bridge this gap, the roundtable proposed increased investment in strategic sectors such as renewable energy, defence and advanced manufacturing, as Draghi recommends.
Charles Michel advocated for increasing the European Investment Bank’s (EIB) capitalisation to boost economic growth and foster innovation. “We must find the resources to invest in defence and business,” he said. With increased support for the private sector, Europe could reduce its energy dependency and work towards net-zero goals while fostering homegrown technological advancements.
PMI’s Andolina highlighted the necessity for structural reform to solidify investment benefits. “We’re not going to solve this problem by just throwing money at it,” Andolino said. “If there is a shift in mindset to put economic productivity and competitiveness first, [we can] create a favourable environment for companies to thrive and for society to become optimistic again.”
Meanwhile, Bo Sandberg, Chief Economist at Active Owners Denmark, highlighted the need to mobilise private capital. “The issue is not the availability of money but getting institutional investors to act, similar to the US,” he argued.
A path forward
The Davos roundtable concluded with a consensus on the need for unity, bold leadership and proactive policymaking in order to navigate geopolitical tensions, stimulate growth and collectively rise to Europe’s challenges.
Participants agreed that the Draghi Report offers a viable roadmap but stressed that its implementation requires overcoming entrenched national interests and political inertia.
As the forum concluded, one message was clear: Europe must act swiftly to compete in the 21st century. The stakes are high, but so too is the potential for renewal and growth.