European Leaders and CEOs Unite to Boost Competitiveness with New Corporatist Approach

In response to the escalating economic competition from the United States and China, European policymakers and business leaders have decided to adopt a new approach: corporatism. This strategy involves a closer alignment between business groups and the government, aiming to bolster the competitiveness of European multinationals.

Last week, a significant meeting took place in Brussels, facilitated by the World Economic Forum. Several dozen CEOs from Fortune 500 Europe companies gathered with European Commission President Ursula von der Leyen and four of her deputies. The discussion covered a range of topics, including simplifying and delaying ESG rules, promoting clean energy as a matter of European independence, developing an industrial AI strategy to compete with the US, and creating a unified regulatory regime for companies operating across Europe.

One of the key outcomes of the meeting was the agreement to hold biannual CEO meetings with the European Commission. This decision marks a departure from the past, where each company had to engage individually with the EU and member states, a process that was time-consuming and inefficient. Jesper Brodin, CEO of Ingka Group (IKEA), who was instrumental in organizing the meeting, highlighted the importance of this new approach. “Up to now, the process was that every company needs to speak to the EU and member states on their end,” Brodin said. “That takes a lot of time. So we agreed to have a biannual CEO meeting with Ursula and the commissioners.”

The primary goal of these exchanges is to enhance the competitiveness of European multinationals, which have been sliding down the Fortune’s Global 500 list for over a decade. Simplifying Europe’s complex and multi-layered regulations is a crucial element of this new corporatist approach. Christian Klein, CEO of SAP, emphasized the need for joint working groups to ensure effective regulation. “I’m not against regulation,” Klein said. “But we can do it better together. We should have joint working groups, to make sure we do this in the right way.”

Another significant shift is the change in Europe’s antitrust strategy. Historically, Europe has been aggressive in its approach to competition and antitrust. However, there is now a consensus that this strategy needs to evolve. Stéphane Séjourné, the European Commission Executive Vice President in charge of Industrial Strategy, explained the new approach. “Our strategy on antitrust has changed somewhat,” Séjourné said. “The Commission now considers our tech companies in relation to international competition, not just internal European competition. So that means encouraging mergers where possible in certain sectors, to give companies sufficient size to compete globally.”

Despite the enthusiasm for this new approach, European corporatism is still in its early stages. There is a need for extensive listening and education to achieve true alignment between business and government. Klein emphasized the importance of focusing on industrial AI rather than competing with the US on “giga factories” and chips needed for generative AI. “That train has left the station,” he noted. “We have industry data. This train hasn’t left the station.”