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ImageYevhen Samuchenko, Resilient by Nature / EEA
Europe faces an increasingly competitive and uncertain global environment, shaped by geopolitical change, technological disruption and growing exposure to climate and environmental risks. What strategic choices can Europe make today to remain prosperous, resilient and competitive towards 2040? A new European Environment Agency (EEA) report explores the forces likely to shape Europe’s future and identifies six ‘no-regret’ options that could strengthen its long-term competitiveness.
The new EEA report, Competitive by nature: Europe’s long-term competitiveness through the lens of sustainability, explores key factors likely to shape Europe’s future to 2040 and shows how investing in sustainability can help Europe strengthen its long-term competitiveness.
The new EEA report looks beyond conventional measures of competitiveness, such as productivity, investment, prices and economic growth. For Europe, long term sustainable competitiveness means creating economic value while maintaining and regenerating the natural and social capital on which future prosperity depends.
Competitiveness based on resource depletion, environmental degradation or the externalisation of social costs may deliver short-term gains while weaking resilience and productive capacity over time. At the same time, sustainability cannot be achieved without innovation, investment and economic dynamism.
Six ‘no-regret’ options
While it is impossible to know which future will materialise, the report identifies six areas where action could strengthen Europe’s sustainable competitiveness across a range of possible future conditions:
- scaling up circular economy approaches and resource efficiency,
- investing in climate adaptation, nature-based solutions and resilient infrastructure,
- strengthening European capabilities in computing, AI and next-generation biotechnology,
- investing in skills, education and lifelong learning,
- supporting social cohesion, public trust and effective regulatory frameworks, and
- maintaining an active EU role in global standard-setting on environmental and social sustainability and in relevant multilateral institutions.
Together, these six ‘no-regret’ options point towards a broader understanding of what could make Europe competitive in the decades ahead. Circularity can reduce demand for primary materials and energy, preserve the value embodied in products and infrastructure, and limit exposure to volatile commodity and energy markets. Digital technologies can improve material traceability, energy-system management and environmental monitoring. Skills can enable new technologies and practices to spread, while effective institutions can provide investment certainty and public legitimacy. International cooperation can support common standards, diversified economic relationships and more resilient supply chains.
The report also highlights the need to identify synergies and manage trade-offs. Electrification, for example, can reduce dependence on fossil fuels while increasing demand for grids and critical materials. Extending the lifetime of buildings and infrastructure can support circularity but may preserve inefficient or climate-vulnerable assets. Bio-based production can replace fossil resources while increasing pressures on land, water and ecosystems. Long-term sustainable competitiveness therefore depends on identifying synergies while avoiding the transfer of risks between sectors, places and generations.
Europe already has a substantial policy foundation supporting many of these directions. The central challenge is to translate policy ambition into coordinated implementation at the necessary pace and scale. This will require sustained investment, coherent policies, appropriate skills, capable institutions and the flexibility to adjust as technologies, climate risks and geopolitical conditions evolve.
Rather than trying to predict a single future or prescribing one pathway for Europe towards 2040, Competitive by nature provides a direction for strategic action: creating economic value while maintaining and strengthening the natural and social capital on which future prosperity depends.
