The release of the anticipated report from Italian economist Mario Draghi sets out his vision for European competitiveness. The report focusses on recommendations to improve European competitiveness and to address challenges that it faces.

The report presents some opportunities for the cooperative movement but there also some clear risks that need to be noted.

© European Union 2024 - Source : EP

Digitalisation

One of the big pushes recommended by the report is to promote the digitalisation of the EU economy. This aims to leverage new technologies, with a focus on AI, which would contribute to job creation. The report highlights the importance of digitalisation in all sectors and the use of digital tools to facilitate jobs in all industries. With adequate support, this is a sector where industrial and service cooperatives could thrive. EU-wide push towards digitalisation will also benefit cooperatives facing obstacles in that field or those that have not yet reached full digital maturity. Importantly the report calls attention to the risks of AI to the European social model and labour market if no actions were taken to train and reskill workers.  

This could be an opportunity for worker and social cooperatives to benefit from further support to achieve their digital transition and increase their outreach and effectiveness.  Currently most digitalisation solutions come from outside the EU. Cooperatives can play an important role as digital champions, offering digital goods and services with close links to their community, bringing innovation at the benefit of all.

Sustainability

The Draghi report emphasises sustainability, circular economy and the transition to clean technologies. Specifically, the report recommends heavy levels on investment in the transition to clean technologies in the short term to be able to benefit from them more in the long term. This could be a real boost not only for cooperative active in the circular economy but also for all industrial cooperatives as sustainability is a key pillar of their business model. The emphasis of the report to lower energy prices and regulation is a positive for cooperatives and their ability to compete outside the EU.

Increase In Competitiveness

The main aim of the report is to increase EU competitiveness on the global scale through more market-driven approaches. The main recommendations in the report look to increase economies of scale for EU firms in the various sectors with a significant drive in the tech sector. This seeks the creation of larger tech and digital groups that could help improve EU competitiveness on the global scale. The creation of cooperative horizontal groups or consortia could be a great solution for small and medium cooperatives, providing that national legislations recognise and allow so.

Decarbonisation and reindustrialisation are at the heart of the Draghi report. It suggests the use of public procurement, state aid and simplification of the legislation to achieve those goals. Under these recommendations, public procurement would focus on green and domestic goods and services, rewarding innovative and sustainable solutions. Public procurement is very important for cooperatives thus rewarding innovative and sustainable solutions, reducing administrative burden and favouring local goods and services could see an increase in public procurement opportunities for cooperatives. Similarly, a strategic approach to state aid will allow worker and social cooperatives to gain easier access to vital funds. The added importance in the report of SMEs as a tool for reindustrialisation by improving their access to state aid and public procurement is equally promising.  

The report calls for a minimum investment of EUR 750-800 billion to boost the competitiveness of the EU. It is vital to direct any additional investment into long-term, sustainable solutions, ensuring increased industrial competitiveness within the framework of the twin transitions. For instance, a part of this budget could be spent to assist workers buyouts, i.e., business transfers to employees, which have been proven to be successful in guaranteeing that industry is kept local and within the EU. In order to safeguard economic activity while avoiding job losses, business transfers to employees under the cooperative model offer a solution to ensure business continuity and revitalise failed industries.

The report highlights the importance of reducing the skills gap currently present in the workforce which is a promising prospect. Adult learning and the creation of harmonised skills certifications are a fundamental part of the report’s recommendations on how to do so. Adult learning and skills training is an important sector for cooperatives, and cooperatives in general invest in their workers upskilling, and increased EU-wide emphasis could be very beneficial.

Shortcomings

The Draghi report sets out a clear plan to improve EU competitiveness and while it does create promising new possibilities, there are some glaring omissions. Crucially, while there are many beneficial policy recommendations for cooperatives and the wider social economy, the report fails to take this into account practices that cooperatives already employ and thus lead the way in, and proposals that would be directly or indirectly beneficial for cooperatives and the wider social economy. This is a worrying exclusion as industrial and service cooperatives form a large part of the European economy and are vital in providing high quality jobs and services. The push for international competition has the capability to boost the European economy but the social economy and the vital role it plays in providing high-quality jobs must not be forgotten.

While the report talks about increasing employment and skills, it does not focus specifically on creating quality employment. CECOP believes that it is vital that the jobs across EU are quality jobs with good working conditions and fair pay. Improving the quality of jobs and working conditions must not be neglected, even as we strive for economic growth. Cooperatives are a living proof that quality jobs, notably trough worker ownership, reinforce the enterprise competitiveness.  

Conclusion

The Draghi report sets out recommendations on how to boost the competitiveness of the EU on the global stage. Overall, it provides promising measures and recommendations that may also be beneficial for industrial and service cooperatives and its principles of sustainability and focus on domestic, local goods and services.

The report puts digitalisation and decarbonisation in the spotlight, something which cooperatives have been working towards. However, according to us, the most promising recommendations remain those aimed at the reduction of the skill gap and reforming public procurement rules, which would lower current barriers and challenges that industrial and service cooperatives face.

At the same time, the report also has some shortcomings, particularly its lack of recognising cooperatives and the social economy, and the lack of measures to preserve social cohesion and quality jobs.

Finally, CECOP welcomes that the Draghi report highlights the need for the European Union to continue to ensure that its cohesion policy remains consistent with the principles and values of social inclusion and equity that have characterized the European welfare. Competitiveness cannot do without cohesion and solidarity and quality of life is not only important as an attractive factor in territories. Well-being is a social right and also contributes to people’s ability to participate in the economic life. Europe needs to attract talent, to tackle the demographic decline, to improve the education system throughout life and to ensure the resilience of a welfare system that not only provides services but is itself part of the creation of significant economic values. Therefore, the adequate funding of the care, education and training sectors, access to housing, and the fight against poverty should not be considered as a cost but an investment.