Changes from plenary report to adopted text

21. Recalls that indicators on the absorption of funds or the rate of budget execution provide information on administrative progress rather than on the actual economic or societal impact of EU spending; highlights that such indicators can create a misleading perception of success when funds are fully spent but fail to generate measurable improvements in innovation, investment or employment; recalls that the ECA has repeatedly criticised the excessive reliance on spending rates and payment milestones in the performance framework for EU programmes; calls for a shift towards result indicators and impact indicators that capture the real effects of EU spending on competitiveness;

22. Underlines that competitiveness is dependent on a coherent set of enabling conditions, including a skilled and healthy workforce, efficient strategic infrastructure, a robust financial sector capable of providing tailored financing for innovation, and well-functioning institutions and markets that reward performance and entrepreneurship; calls on the Commission to develop specific performance indicators reflecting these structural enablers and their contribution to productivity and growth;

23. Recalls that the Draghi report underlines that excellence in research and innovation is fundamental to the EU’s competitiveness and that there should only be one selection criterion, namely excellence, within the EU research and innovation system, including the Horizon Europe programme; reiterates, in this regard, its position that funding for research and innovation should continue to be guided by the principle of excellence and should remain merit-based;

24. Stresses that project-level data should be the basis for enhanced performance reporting for financial instruments implemented under indirect management, such as InvestEU; notes, however, that these should be in a standardised format and limited to the key information needed for measuring the success of the programme, such as the mobilisation of public and private investments that could not have taken place without the programme; recognises that, owing to the market- and demand-driven nature of financial instruments, the performance of such programmes depends on their take-up by the market, which limits the Commission’s ability to establish predefined milestones and targets;

25. Stresses that boosting the EU’s competitiveness requires a shift from short-term crisis management towards a long-term strategy based on innovation, efficiency, sustainability, strategic autonomy and global openness; calls for a renewed commitment to strengthening the single market, reducing regulatory fragmentation and ensuring that EU programmes support the real economy; highlights that the success of European competitiveness projects depends on the mobilisation of public and private capital; calls on the Commission to introduce specific indicators to measure the leverage effect of EU funds in mobilising public and private investment, the ratio of public-to-private funding and the return on investment achieved;

26. Considers it necessary to establish a comprehensive ex ante risk assessment framework, particularly for projects characterised by a high-risk, high-reward profile, in order to ensure a balanced evaluation of their added value, costs and benefits; underlines that achieving the EU’s policy objectives on competitiveness requires a robust audit and control system supported by a coherent risk assessment methodology; stresses that such a methodology should allow for proportionate levels of risk essential for fostering innovation, while ensuring adequate safeguards for the protection of the EU budget, especially against fraud and non-financial risks;

27. Suggests that, in order to better evaluate the impact of EU funding on competitiveness, more thorough macroeconomic modelling should be employed, integrating the latest advances in economic research; notes that models that capture household and firm heterogeneity and distributional effects allow for a more comprehensive ex ante assessment of the impact of EU funding on productivity, investment behaviour and regional competitiveness; suggests that this approach be complemented by the use of microdata and regional performance indicators to improve the evidence base for policy design and the targeting of funds;

28. Calls on the Commission and the Member States to establish and consistently use, throughout the next MFF, a harmonised set of core indicators such as those that are already part of the European Innovation Scoreboard, aimed at fostering competitiveness across Member States so as to enable comparability, benchmarking and aggregation of data at EU level, while also allowing for the use of indicators tailored to national or regional needs, where appropriate; stresses that all relevant stakeholders should be consulted in defining and reviewing indicators in order to ensure that they reflect real competitiveness needs, while adhering to high labour and social standards;

29. Considers that, in the case of projects that foster innovation and support strategic technologies, the following output indicators could be used: the volume of EU and private sector funding mobilised, the number of projects funded per sector (i.e. artificial intelligence, quantum, biotech), and the number of unicorns, start-ups and scale-ups created or expanded in the EU that have received EU funding, also measuring the percentage of women-led start-ups funded where appropriate; considers that result indicators could include the number of patents filed by EU-funded projects, the return on EU investment by sector, the change in the employment rate, the survival rate of EU-funded companies after three years, the increase in the number of European initial public offerings (IPOs), the increase in the number of exporting companies, and the number of enterprises reaching high digital intensity; considers that it is necessary to track and report impact indicators such as the increase in capacity (output per year) in the manufacturing of deep and digital technologies (e.g. specific equipment types), the increase in the volume of venture capital invested in the EU, the increase in the market capitalisation of EU companies, and market adoption and revenue growth attributable to EU-funded innovations;

30. Considers that industrial relocation and self-sufficiency in critical raw materials should be supported in order to reduce the EU’s strategic dependencies; proposes that progress could be measured with output indicators such as the number of projects and SMEs that have relocated to the EU, the number of start-ups and scale-ups created or expanded – also measuring the percentage of women-led start-ups and scale-ups where appropriate – and the level of industrial job creation in targeted regions; considers that result indicators could include the increase in the share of critical raw materials imported from new strategic partners or sourced from the EU and the increase in the volume (tonnes) of critical raw material recycled, higher productivity and gross value added in targeted value chains, greater resilience of supply, and improved trade performance;

31. Stresses the need to invest in smart grids, energy storage and hydrogen corridors to facilitate a resilient and competitive energy system; underlines that measures in this regard are essential to reduce energy price volatility, strengthen industrial competitiveness and secure Europe’s transition to a sustainable, low-carbon economy;

32. Considers that joint industrial energy purchasing and industrial decarbonisation should be pursued in order to reduce energy costs and enhance security of supply, while ensuring that the resulting measures do not have an undue impact on any Member State’s energy security; proposes that progress could be measured with output indicators such as the number of participating companies, the volume of energy purchases and the share of renewable energy in joint contracts; considers that result indicators such as additional energy capacity installed in electricity production (MW) could be used; further considers that impact indicators could include the changes to average energy prices in targeted industries, the reduction in supply interruption, the increase in clean energy use and the reduction of greenhouse gas emissions (e.g. in tCO2e) ;

33. Considers that the EU should invest in talent in strategic and critical sectors to increase its long-term competitiveness through a capable workforce, including by supporting participation in vocational training, lifelong learning and skills development; suggests that progress could be measured with output indicators such as the number of people trained annually (with a specific focus on gender balance and social inclusion), the number of people who have graduated with a science, technology, engineering or mathematics (STEM) degree from university or who have undertaken vocational education and training courses with a STEM focus, the participation rate in adult and lifelong learning programmes and the satisfaction rate of partner companies and social partners; considers that result indicators could include changes in the employment rate, the transition rate from training or temporary employment to permanent employment, the occupation rate, the wage progression rate and the retention rate in targeted sectors;

34. Notes with concern that excessive regulatory and administrative burdens continue to undermine the competitiveness of EU companies compared with other global economic blocs; stresses that such burdens raise operational costs, reduce sectoral productivity and create barriers to market entry for new firms, thereby discouraging competition and innovation; notes, furthermore, that these inefficiencies may also translate into higher prices for consumers;