Activites

The SPES project suggests that a deeper shift is needed towards a just and green transition — one that redefines the very meaning of productivity, innovation, and competitiveness and how they must support sustainability and equity objectives. SPES does not treat these as separate or even competing dimensions, but as mutually reinforcing components of a broader vision of Sustainable Human Development.

The European Commission has started embracing the idea that long-term competitiveness cannot be pursued independently of climate neutrality, environmental and social resilience, yet in practice the balance has tilted back towards competitiveness and productivity, often relegating sustainability and equity to secondary concerns. This creates the risk that short-term efficiency pressures undermine longer-term commitments to
a just and green transition. Key strategic documents such as the European Green Deal and, more recently, the Competitiveness Compass, converge on the notion that the green and digital transitions are not constraints to growth, but the very drivers of a more resilient and prosperous economic future.

Yet, the Competitiveness Compass reveals significant shortcomings in addressing the social dimension: it focuses mainly on skills and labour market participation, while broader issues of social equity and inclusion remain largely absent, and sustainability priorities are only partially integrated.

Rather than focusing exclusively on technological advancement or R&D intensity, SPES foregrounds the direction, inclusiveness, sustainability, and societal relevance of innovation processes. In this view, public policy is not just an enabler of market efficiency, but a co-shaper of trajectories of change that must align with ecological thresholds and social aspirations. By approaching innovation and productivity through this lens, SPES highlights the importance of integrated and coherent policy mixes that span different domains and time horizons.

Policy Recommendations

1. Encourage Member States to reframe national productivity strategies around human development and ecological boundaries, using concrete EU-level steering mechanisms.

The EU should steer the reframing of national productivity strategies through decision-making and exchanges of good practice in the Competitiveness Council, the European Semester process, and the work of national productivity boards, supported by clear conditionalities in EU budget allocation and cohesion funding.

This guidance could also be reinforced via the Competitiveness Compass and the EU Industrial Policy framework, ensuring alignment with long-term sustainability objectives. Expanding capabilities means not only investing in technological and infrastructural assets but also in human resources: education, training, and skills development, including upskilling and reskilling in sectors with high greening potential, and ensuring access to life-long learning opportunities across the workforce.

This requires embedding sustainability and equity priorities into recommendations at national and territorial level and ensuring that funding instruments such as the programmes for research and technological development, cohesion policy, the Just Transition Fund, as well as the
proposed European Competitiveness Fund under the post-2027 EU budget and a potential future Sovereignty Fund explicitly support this integrated vision.

2. Encourage coherence and integration across policy mixes.

Align technology-push and demand-pull instruments with regulatory, financial, and institutional measures that support sustainability and equity goals. Examples include combining R&D  aand innovation subsidies with binding efficiency standards, tax incentives for low-carbon technologies, green public procurement, and advisory services or cluster initiatives that build
institutional capacity.

Special attention should be paid to timing, sequencing, and governance coordination at all relevant levels to ensure synergies. Proper sequencing allows early technology development to be followed by market creation and uptake, reducing the risk of stranded innovations; effective governance coordination helps avoid contradictory incentives across policy domains (e.g. when industrial subsidies undermine environmental goals).

More coherent and integrated mixes also increase policy credibility and predictability, which are key for mobilising private
investment and ensuring that benefits are widely distributed.

3. Recognize citizen-generated data and embed public participation in environmental governance.

Invest in place-based capabilities, particularly in regions that show potential for green and complex technological diversification, by fostering synergies between education, training, quality employment, digitalisation, and environmental and social innovation. Strengthening these ecosystems is essential to avoid widening territorial divides: without targeted support, lagging regions risk being excluded from the benefits of green and digital transitions, reinforcing inequalities and slowing down collective progress.
At the same time, attention is needed in strategic sectors for sustainable production — such as renewable energy, circular textiles, or sustainable agri-food — where demand
is growing but innovation and upgrading capacity may lag. EU and national policies should therefore combine cohesion funding and Smart Specialisation Strategies with
targeted sectoral initiatives, ensuring that both weaker regions and critical sectors are equipped to deliver on sustainability goals.

Concrete examples include linking regional development funds to reskilling programmes in energy-intensive industries, creating innovation clusters in circular manufacturing, or supporting local supply chains in agri-food with digital and environmental technologies.

4.Embed binding sustainability and equity criteria in the governance of global value chains (GVCs).

Trade, procurement, and innovation policies should incentivise sustainable and equitable practices across the entire chain, while enhancing the bargaining power and capabilities of small producers and workers in the Global South. This can be pursued through the EU’s existing governance frameworks, such as the Corporate Sustainability Due Diligence Directive, which obliges companies to identify and mitigate social and environmental risks in their supply chains, and the EU Regulation on Deforestation-Free Products. The EU public procurement directives should integrate mandatory sustainability criteria and strengthen rules for socially responsible procurement. In addition, trade agreements (e.g. EU–Mercosur) and the
Generalised Scheme of Preferences (GSP+) can be reformed to embed enforceable labour and environmental standards. Finally, multi-stakeholder initiatives such as the OECD Due Diligence Guidance and the ILO conventions provide reference points that the EU can anchor into its external action. In this sense, GVCs governance should evolve from a shareholder-driven logic to a stakeholder-oriented approach, where firms, workers, communities, civil society, and the environment are recognised as legitimate actors in decisionmaking.
This echoes the shift from triple to quintuple helix models of innovation systems, embedding participatory governance and ecological concerns directly into competitiveness strategies.

5. Develop new indicators, monitoring and evaluation policy frameworks that reflect the multidimensional nature of competitive sustainability, reflecting, in addition to competitiveness and productivity, environment and social sustainability concerns.

As illustrated in previous SPES work (see the SPES Policy Brief n°3), standard metrics should be complemented by indicators of environmental integrity, social equity, and
institutional inclusiveness to guide policy-making and policy evaluation. This shift in measurement requires moving beyond traditional cost–benefit analyses focused on efficiency, and instead adopting evaluation approaches that capture long-term resilience, distributive effects, and cross-sectoral synergies. Policy design should explicitly link objectives, instruments, and expected outcomes to these multidimensional indicators, so that trade-offs (e.g. between productivity growth and resource use, or between competitiveness and social equity) are made visible and can be managed transparently.
Evaluation frameworks should integrate both ex-ante assessments (e.g. sustainability checks before policy adoption) and ex-post learning mechanisms (e.g. regular reviews of equity and environmental impacts), ensuring that policy mixes are adjusted when unintended effects emerge. In this way, indicators become not just tools for monitoring, but anchors for adaptive policymaking — allowing decision-makers to recalibrate instruments, rebalance mixes, and strengthen coherence across innovation, environmental, and social domains..

These Policy Recommendations are part of the fourth Policy Brief delivered by the SPES Consortium