EU competitiveness: economic structure, innovation, and mechanisms for overcoming imbalances

Abstract

Under intensifying competition, one of the most important tasks of management systems at any level is the assessment of the advantages, disadvantages, opportunities, and the actual state of the management object, as well as the formation of mechanisms for increasing competitiveness. The low average annual GDP growth rate of the EU compared to the world’s leading countries is one of the main indicators of problems, a warning regarding the negative prospects for maintaining the social model in the long term. The purpose of the article is to determine the impact of the structure of the EU economy by the size of business entities on innovation processes and competitiveness. The structure of the EU economy and of innovation-leader countries has been analysed, and their similarity and significant difference under the conditions of the development of small innovative business have been identified. Based on the assessment of the history of the creation of the world economy’s leading enterprises, it has been determined that the economic system of the United States promotes innovation activity and has led to the emergence of breakthrough innovations that allow the country to preserve and increase its competitiveness. The economic activity and research and development intensity in the EU (2021–2025) have been analysed, and the state of innovation dynamics has been identified as innovation inertia.
The TOP 100 companies (2025) have been analysed in terms of economic activity, R&D intensity (2021–2023), and the capitalisation of technology companies, which made it possible to establish a catastrophic gap between the investment activity of the business sector in the EU and in innovation-leader countries (1.8–2.6 times). The regional structure of the Top 100 global companies by market capitalisation across innovation and traditional sectors (2025) has been examined, and the quantitative leadership of the USA in the field of information technologies and communication services (USA – 20, EU – 4) and qualitative advantages in total capitalisation have been established.
A deficit of financial capacity of the largest EU companies and the concentration of innovation capacity in the medium-technology sector have been identified. The necessity of a fundamental revision of European economic policy, the development and implementation of large-scale reforms, including those within the competitiveness management system aimed at stimulating and supporting innovation, has been substantiated.