As the European Union prepares to launch the new European Competitiveness Fund (ECF) in 2028, understanding its territorial impacts is becoming increasingly important. To support this process, ESPON and the European Committee of the Regions (CoR) carried out a Territorial Impact Assessment (TIA), bringing together experts from across Europe.

A territorial perspective on competitiveness

The European Competitiveness Fund aims to strengthen Europe’s global competitiveness by supporting innovation, industrial development and strategic sectors. However, competitiveness is not evenly distributed across Europe, and the assessment highlighted that regional differences in innovation capacity, skills, governance and economic structure play a crucial role in shaping how regions can benefit.

Using the ESPON TIA Quick Check methodology, experts assessed a scenario in which the ECF is implemented purely based on excellence criteria, without territorial targeting. This approach allowed for a structured analysis of potential impacts across economic, societal, environmental and governance dimensions.

Key findings: concentration, capacity and inclusion

The assessment revealed that an excellence-driven implementation of the ECF is likely to generate strong positive effects on overall competitiveness, particularly in regions with established innovation ecosystems, high R&D investment and strong networks of firms and institutions.

At the same time, the results point to several important territorial challenges:

• Concentration of benefits:
   Funding is likely to be concentrated in already competitive regions, particularly in northern and central-western Europe and in metropolitan areas, reinforcing existing territorial disparities.
• Barriers for less developed regions and SMEs:
   Regions with weaker administrative capacity and less developed innovation systems may struggle to access funding, even if they have economic potential. Many SMEs, especially outside strong innovation networks, may face difficulties participating in highly competitive funding schemes.
• Societal implications:
   While the fund could support job creation and skills development in some regions, there is also a risk of brain drain and skills mismatches, particularly in rural and peripheral areas, unless complementary measures are in place.
• Limited environmental balancing effects:
   Although some positive impacts are expected in carbon-intensive regions through industrial decarbonisation, environmental benefits are likely to remain modest and unevenly distributed.

The importance of governance and territorial knowledge

A key message of the assessment is the importance of governance. While the ECF aims to simplify funding through a single rulebook and streamlined procedures, involved experts in the TIA highlighted that administrative capacity and experience with EU programmes remain critical factors in accessing funding.

The TIA also points out to the need of involving local and regional authorities more systematically. Their place-based knowledge is essential for ensuring that investments are anchored in regional contexts and generate long-term benefits.

Towards a more balanced approach

The TIA findings underline that competitiveness and cohesion are closely interlinked. While the ECF has strong potential to boost Europe’s innovation and industrial capacity, its territorial impacts are likely to be uneven if no corrective mechanisms are introduced.

The involved experts, therefore highlighted the need for:

• stronger support for less developed regions and SMEs,
• improved accessibility and capacity-building measures,
• better integration with regional strategies and governance frameworks,
• and enhanced territorial monitoring of impacts.

Supporting evidence-based policymaking

The results of this Territorial Impact Assessment were used to support the Committee of the Regions in drafting the Opinion “European Competitiveness Fund (ECF)”. Its provides valuable insights for EU policymakers as they shape the future design of the European Competitiveness Fund. By highlighting potential territorial imbalances and identifying key challenges, it contributes to ensuring that the fund supports not only global competitiveness, but also balanced and inclusive development across Europe’s regions.