Europe’s competitiveness agenda has become broader and more demanding. Raising productivity and strengthening innovation remain central, but they must now go together with resilience, strategic autonomy and creating sustainable economic value. Geopolitical tensions, disrupted supply chains and dependence on foreign energy, critical materials and technologies have exposed new vulnerabilities. At the same time, Europe continues to struggle to turn its research and innovation strengths into organisations, technologies and industries that can grow and compete at scale.
The changing agenda has a strong urban dimension. Cities and city-regions concentrate the economic, knowledge and innovation ecosystems, skills and infrastructure essential to achieving these ambitions. This report examines how European urban economies are positioned in this new context, drawing primarily on the Eurocities Pulse survey on Urban Competitiveness among senior representatives of 60 European cities and city-regions across 22 countries. The survey captures their assessment of local strengths, constraints and policy capacity; with open responses providing further insight into why bottlenecks arise and how they interact.
The survey reveals a striking contrast between strong knowledge foundations and tightening physical conditions for growth. Respondents generally rate universities, research capacity, skilled labour, digital connectivity and quality of life as competitive strengths. At the same time, they point to housing, energy, grid capacity and industrial land as important constraints. Their responses show how these pressures reinforce each other: housing shortages affect talent retention, grid congestion delays investment and decarbonisation, and shortages of technical workers slow infrastructure delivery.
The survey also shows that competitiveness challenges differ considerably between cities. The open responses suggest a clear link with economic structure. Industrial and production-oriented cities more often point to energy and grid capacity, industrial land, infrastructure, permitting and technical labour. In more knowledge- and service-oriented economies, concerns more often centre on housing, talent retention, specialised spaces, commercialisation and growth finance. Cities also report very different positions in strategic value chains, ranging from research and technology development to production, market functions and deployment. Europe’s urban competitiveness is therefore built on differentiated local strengths rather than a uniform model.
The survey reveals vulnerabilities behind otherwise strong competitive positions. Respondents point to dependence on declining industries or export markets, exposure to geopolitical uncertainty and natural hazards, and strategic dependence on non-European technologies and digital services. These vulnerabilities differ between cities, but they underline that urban economic development increasingly relies on navigating vulnerabilities and being able to adapt when established sources of growth come under pressure.
A recurring concern in the survey is what happens after innovation. Many respondents report strong innovation ecosystems, while identifying greater difficulties in commercialisation, growth finance, technology diffusion and large-scale deployment. New technologies do not automatically spread through established firms and SMEs, and successful pilots can remain stuck at the experimental stage. The report therefore distinguishes three routes from innovation to wider economic impact: growing innovative firms and commercialising research; spreading new technologies through the existing economy; and moving urban experiments into large-scale deployment.
The findings underline the importance of organising capacity. Respondents describe cities as conveners of firms, universities, investors, utilities, skills providers and other actors. Yet the survey also shows that important levers over finance, skills, energy systems and major investment programmes frequently lie at regional, national or European level. Local coalitions can help coordinate action, but they depend on effective multi-level governance.
Cities report a persistent mismatch between integrated territorial challenges and fragmented European funding instruments, and between support for research and innovation and support for deployment and enabling infrastructure. These findings point to a stronger territorial dimension in European competitiveness policy, and namely in the upcoming European Competitiveness Fund. Enabling infrastructure such as grids, industrial sites, laboratories and housing needs to be recognised as key conditions for urban competitiveness. Research and demonstration need stronger connections to growth finance, procurement, production and market adoption. And cities need longer-term investment pathways, a meaningful role in competitiveness governance and sufficient capacity to turn strategies into investable projects. These recommendations follow directly from the constraints and policy mismatches reported by cities in the survey.
The outlook from cities themselves is nevertheless positive. 93% of respondents are moderately or very confident that their city can maintain or improve its relative competitiveness towards 2035. But their priorities for the coming decade also show what that confidence depends on: strategic SMEsinvestment, access to finance, scale-ups, skills and infrastructure. The survey sends the message that turning urban strengths into investment, scaling and transformation will require stronger delivery capacity and better alignment between local, national and European action.
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