Survey of city economic experts: Cities are driving Draghi’s competitiveness agenda, but need EU recognition to scale action

City administrations are taking decisive action to advance the goals in Mario Draghi’s report on European competitiveness, from strengthening strategic sectors such as AI, clean energy and defence, to turning innovation into economic deployment.

But city leaders warn that Europe’s competitiveness agenda will fall short unless the EU tackles the practical barriers holding back growth on the ground, including industrial land, housing, energy costs, grid capacity and access to finance.

These are the key findings of the first-ever Eurocities Pulse survey on urban competitiveness, developed with EURICUR and based on responses from city officials leading economic development in 60 cities across 22 European countries.

The survey reveals that 85% of cities are actively contributing to at least one strategic value chain, which are the sectors and supply chains Europe needs to strengthen, scale and secure for its economic future.

City activity is especially strong in the sectors that are central to Europe’s competitiveness. 95% of cities report activity in AI, data and digital infrastructure, 93% in health, biotech and medtech, 90% in clean energy technologies, 88% in renewable energy and smart grids, 83% in advanced manufacturing and robotics, 80% in critical raw materials and circular materials, and 78% in defence, aerospace and dual-use technologies.

In Nicosia, for example, the CYENS Centre of Excellence and iNicosia Digital Twin are supporting AI, digital innovation and smarter city planning. In Vantaa, the Varanto thermal energy storage project shows how cities can drive clean energy deployment at scale. In San Sebastian, quantum research, smart mobility and entrepreneurship hubs are helping connect research with market-ready innovation.

“The Draghi report made clear that Europe must close its competitiveness gap. This survey shows that cities are crucial to achieving this goal,” states André Sobczak, Secretary General of Eurocities. “Cities are where research, production, public demand, procurement, service delivery and market uptake come together. But to turn these strengths into economic scale, cities need stronger EU support on land, housing, energy, grid capacity and finance.”

Cities do not see competitiveness as being held back primarily by a lack of innovation or talent. Instead, they point to local constraints that make it difficult for businesses to grow, invest and deploy new technologies. 68% point to a lack of industrial land and production facilities, while 53% identify housing availability and affordability, 53% energy costs, 42% electricity grid capacity and 35% access to capital and business funding.

European cities are rich in the assets that drive competitiveness. Most cite quality of life (92%), education (88%), digital infrastructure (82%), research institutions (82%) and skilled talent (73%) among their key strengths.

Yet these advantages are not consistently translating into economic scale. Fewer than half of cities (42%) say research and innovation are effectively commercialised, while only 23% believe innovative firms have sufficient access to private capital. This points to a critical competitiveness gap: Europe often succeeds at generating knowledge but struggles to turn it into large-scale economic deployment.

Cities also see major opportunities in Europe’s green and digital transition. 92% agree that AI can help address societal and urban challenges, while 83% say digitalisation and AI increase company productivity. 77% say climate objectives are already integrated into local economic and industrial policy, and 73% have a clear strategy to combine growth with decarbonisation.

But the survey also highlights risks. 57% of cities identify dependence on non-European digital services as a strategic risk, while 42% say technological change could create new social inequalities. On the green transition, only 22% agree that EU regulations provide enough investment certainty for green industries, and only 40% say EU funding is effective in accelerating local decarbonisation.

The future European Competitiveness Fund must therefore support deployment, not only innovation. 72% of cities want direct access to competitiveness funding, while 62% want large-scale urban investment support for strategic infrastructure.  Cities also want a stronger role in shaping programme priorities and support to move from testing to large-scale deployment.

“The European Competitiveness Fund needs to provide direct access for cities, investment in strategic urban infrastructure, and a stronger role for local governments in shaping priorities” says Sobczak. “Without cities, Europe risks leaving major economic potential untapped.”

Looking ahead, cities remain positive, but not complacent. 93% say they are moderately or very confident that their city can maintain or improve its competitiveness in Europe by 2035.

“We are calling on the EU institutions to recognise cities as essential partners in Europe’s competitiveness agenda,” states Sobczak.” If Europe wants stronger productivity, strategic autonomy and clean industrial leadership, it must invest in the urban ecosystems where knowledge, production, markets and circular systems come together.

Other key findings include

• 67% of city-value chain trajectories point to growth or transformation over the next five years, showing that cities are not standing still but looking to scale their role in Europe’s strategic sectors.

• Cities often lead economic development locally, but key levers remain shared: 88% report high influence over spatial planning, compared with only 32% over finance instruments and 30% over education and skills policy.

• EU territorial and research instruments remain more visible than scale-up finance tools: 58% of cities cite ERDF/ITI, 50% ESF+ and 48% Horizon Europe as major contributors. Instruments such as InvestEU, the EIC and EIB financing help bridge the gap between research and market deployment, but should be strengthened and better tailored to cities’ needs.

• The skills gap is a growing competitiveness issue: only 25% say education and training systems adapt quickly to company needs, while 47% say they are losing talent to other cities.

1. The data is drawn from the first Eurocities Pulse Survey on Urban Competitiveness, a perception-based survey of 60 cities in 22 countries. It gathers the views of senior city officials responsible for innovation, economic development and competitiveness. This work has been carried out by Eurocities in partnership with the research centre EURICUR, through the Eurocities Economic Development forum.

2. An infographic presenting the key findings of the Eurocities Pulse survey is available here. The preliminary results of the study from EURICUR are available here. You can also view a presentation of the survey results, from EURICUR and Eurocities.

3. The Pulse survey also looked at competitiveness bottlenecks and enabling conditions; the role of urban ecosystems in strategic value chains; scaling, deployment and governance challenges; as well as experiences and expectations regarding EU funding and the future ECF. Professor Willem Van Winden and Dr. Victor Cabral, authors of the report are available to share more data with journalists as needed.

4. Eurocities Pulse is a Eurocities brand: Eurocities Pulse surveys are organised by Eurocities on a regular basis, across different topics. This Eurocities Pulse on urban competitiveness was inspired by the Eurocities Pulse Mayors Survey and was designed to provide evidence about cities’ role in the new EU Competitiveness agenda.

5. Eurocities wants to make cities places where everyone can enjoy a good quality of life, is able to move around safely, access quality and inclusive public services and benefit from a healthy environment. We do this by networking more than 200 larger European cities, which together represent some 150 million people across 38 countries, and by gathering evidence of how policy making impacts on people to inspire other cities and EU decision makers. Connect here or by following the LinkedIn, Instagram, BlueSky and Youtube accounts.

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