No. 34 The future of the Common Agricultural Policy 110 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR economic and industrial model. The author also points out that only four of the world's 50 largest technology companies are based in Europe, highlighting a significant technological gap that compromises the continent's competitiveness in a global context where innovation plays an ever more decisive role in economic success. The main challenge for the EU is to preserve and strengthen its relevance in an increasingly competitive international system, in which innovation capacity and strategic autonomy are increasingly important. 2. Diagnosis and Global Context The Report identifies and analyses the changes that have taken place in the international economic balance, highlighting the consolidation of the US and China1 as dominant poles in terms of technological innovation, industrial investment and geopolitical influence. The US stands out for its leadership in cutting-edge technologies such as artificial intelligence, semiconductors, biotechnology and quantum computing, driven by strong private sector investment and robust public policies supporting innovation. China, meanwhile, has consolidated its position as the world's second largest economy, supported by intensive state investment, the promotion of technological autonomy and international expansion, particularly through the Belt and Road Initiative2. This model combines economic development and subsequent geopolitical projection, posing a structural challenge to European competitiveness. In this context, in order to respond to these threats, three major areas of action have been identified to relaunch sustainable growth in the EU: Innovation: Investment deficit in innovation compared to the US and China; Decarbonisation: High energy costs, which reduce industrial competitiveness; Security: External dependence on critical raw materials and strategic technologies, exacerbated by regulatory and institutional fragmentation. Draghi estimates that the EU needs an additional annual investment of between €750 billion and €800 billion to catch up technologically and consolidate its industrial base. To make this financial effort feasible, the Report proposes the joint issuance of EU debt, similar to the model used by the Recovery and Resilience Facility, with the aim of mobilising resources on a scale compatible with the structural challenges facing Europe. 3. Strategic Axes of European Competitiveness The Report proposes an integrated strategy based on three fundamental axes to be developed in a coordinated manner between Member States (MS): I. Closing thennIovationGap: Insufficient investment in innovation is identified as one of the main obstacles to European growth. EU companies invest less than €270 billion in research and development (R&D) than their US counterparts, and Europe's technology sector remains undersized. Much of Europe's industrial structure remains focused on traditional industries such as automotive, while emerging sectors such as artificial intelligence, biotechnology and advanced robotics struggle to establish themselves. Draghi proposes the creation of a "European Innovative Company" status, which would facilitate access to 1 China is the world's second-largest economy in terms of gross domestic product (GDP), with the United States ranking first. In 2025, China's GDP was estimated at around $19.23 trillion, while the US GDP was estimated at around $30.51 trillion, according to data from the International Monetary Fund (IMF). 2 Also One Belt, One Road and frequently referred to as the New Silk Road.
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