Europe’s quest for global economic relevance: on the productivity paradox and the Draghi report

Capello, Roberta and Rodríguez-Pose, Andrés ORCID: 0000-0002-8041-0856 (2025) Europe’s quest for global economic relevance: on the productivity paradox and the Draghi report. Scienze Regionali, 2025 (1). 7 - 15. ISSN 1720-3929 (In Press)

Text (1720-3929-42600-2) - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (197kB)

• Scopus publication

Abstract

Europe’s existential economic challenge has been laid bare in Mario Draghi’s September 2024 competitiveness report. The continent faces a profound productivity crisis, one that threatens to relegate Europe to the margins of global economic influence. Yet, while the report offers a comprehensive diagnosis and prescribes remedies for Europe’s anaemic productivity growth, it overlooks a crucial dimension: the power of place. This paper examines how this territorial oversight undermines the report’s effectiveness. We argue that Europe’s path to renewed economic vigour lies not in homogeneous continental strategies, but in harnessing its potential and diverse regional capabilities. The continent’s economic renaissance depends on recognising that its apparent weakness – its territorial diversity – may indeed be a great strength. From our perspective, unlocking Europe’s latent potential requires policies tailored to regional specificities. Only by embracing rather than suppressing its endogenous potential, wher-ever it can be found, can Europe hope to reverse its productivity decline. The challenge ahead is not merely technical but fundamentally territorial: Europe must craft a future where productivity growth emerges from its territorial distinctiveness, not in spite of it.

Item Type:	Article
Additional Information:	© 2025 Società editrice il Mulino
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HC Economic History and Conditions
JEL classification:	R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R10 - General R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy
Date Deposited:	01 Apr 2025 09:51
Last Modified:	08 Apr 2025 16:04
URI:	http://eprints.lse.ac.uk/id/eprint/127768

Actions (login required)

View Item