Draghi cites Surico and Martinez to urge bold investment and renewed European competitiveness

At a high-profile conference in Brussels on 16 September 2025, former ECB President Mario Draghi opened his keynote by citing two influential papers by London Business School's Professor Paolo Surico and Dr Joseba Martinez emphasising the critical role of government spending in driving innovation and long-term productivity. The event, titled “One Year After the Draghi Report”, also featured European Commission President Ursula von der Leyen and reviewed the Commission's progress in implementing the recommendations of Draghi’s landmark competitiveness report.

Draghi warned that Europe’s growth model faces mounting pressures: trade tensions with the US, rising Chinese competition, and strategic dependencies, from defence to critical materials, threaten both economic resilience and sovereignty. Public debt is rising, yet the continent must fund an estimated €1,200 billion of annual investment through 2031, nearly half from public coffers.

The keynote highlighted three priorities: closing the innovation gap in advanced technologies, decarbonising while supporting growth, and strengthening economic security. Draghi stressed that Europe must act with “new speed, scale and intensity,” using public funds strategically to catalyse private investment in AI, industrial automation, energy infrastructure, and defence.

Citing Surico and Martinez, he proposed concentrated funding models for breakthrough technologies, akin to Japan’s Rapidus semiconductor initiative, and highlighted public procurement and competition policy as levers to scale Europe’s industrial and technological capabilities.

Draghi called for harmonised regulations, faster EU-level project execution, and potential joint debt issuance for strategic projects. Without bold, coordinated action, Europe risks falling behind global competitors.

Von der Leyen echoed Draghi’s message, committing the Commission to place competitiveness at the centre of its agenda and to accelerate transformative investments across the EU.

Relevant research cited in the Draghi speech is as follows:

Gazzani, A., Martinez, J., Natoli, F. ,Surico, P., Martinez, J. (2025), “The Public Origins of American Innovation”, mimeo

Antolin-Diaz, J. and Surico, P. (2025), “The Long-Run Effects of Government Spending”, American Economic Review, Vol. 115, No. 7, pp. 2376–2413