Shaping the Intelligent Age: How Europe Can Thrive

Europe faces high production costs compared to competitors like China, necessitating a shift toward innovation-led growth. The report identifies eight key solutions to boost competitiveness: closing growth-stage funding gaps, implementing a voluntary '28th Regime' for seamless cross-border scaling, reforming merger rules to create global champions, and simplifying regulatory approvals. Additionally, it emphasizes accelerating AI through strategic public procurement, unlocking industrial data sharing, building sovereign compute infrastructure, and creating dynamic talent markets. The document highlights that while EU-level policy is critical, significant productivity gains depend on bold action from private firms and effective public-private partnerships.

• Europe cannot compete on cost alone, as its production costs typically exceed those of leading competitors such as China by more than 40%, making innovation the primary path to competitiveness.
• Europe possesses significant untapped resources for growth, including annual household savings of €1.4 trillion and a higher proportion of tertiary students in STEM fields (27%) than in the US.
• There is a significant growth-stage funding gap in Europe; European companies raise approximately half as much growth capital as comparable US firms, and US venture capital investment is six to eight times higher than in the EU.
• The proposed '28th Regime'—a voluntary, digital-first European company framework (EU Inc.)—aims to reduce the burden of navigating 27 different national rulebooks for incorporation, fundraising, and employee equity.
• European markets are highly fragmented compared to the US and China, particularly in telecoms (approximately 60 operators in Europe versus four in the US and two in China) and banking (roughly 22 major institutions versus four in the US).
• Europe's AI investment is significantly lower than its global peers, with European firms investing 3% of total capex and R&D in the AI value chain, compared to 17% for US firms and 13% for Chinese firms.
• Europe faces a critical compute gap, accounting for only 5–10% of global AI compute capacity, while the US controls 60–75%.
• Public procurement represents a massive untapped lever for innovation, totaling approximately €2 trillion annually, or roughly 14% of EU GDP.
• Productivity growth in Europe is highly concentrated; in Germany, just 0.2% of firms (29 companies) generated nearly half of all positive productivity growth between 2019 and 2023.
• Tech talent flows have reversed for the first time, with 1,426 workers per month moving from the US to Europe, compared to 1,385 moving in the opposite direction.

APA

World Economic Forum (n.d.). Shaping the Intelligent Age: How Europe Can Thrive. https://reports.weforum.org/docs/WEF_Shaping_the_Intelligent_Age_2026.pdf

Chicago

World Economic Forum. Shaping the Intelligent Age: How Europe Can Thrive. n.d. https://reports.weforum.org/docs/WEF_Shaping_the_Intelligent_Age_2026.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Shaping the Intelligent Age: How Europe Can Thrive |url=https://reports.weforum.org/docs/WEF_Shaping_the_Intelligent_Age_2026.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforumndshaping, author = {{World Economic Forum}}, title = {{Shaping the Intelligent Age: How Europe Can Thrive}}, institution = {World Economic Forum}, url = {https://reports.weforum.org/docs/WEF_Shaping_the_Intelligent_Age_2026.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }