Major automotive, chemicals, raw materials, engineering and energy companies are joining forces to overcome the EU’s competitive disadvantage in next-generation battery technologies and build a European battery manufacturing base. Backed by policy support and an increase in funding from the EU, the Battery Alliance aims to increase Europe’s competitiveness vis-à-vis Asia and the US.

The immediate objective is to create a competitive manufacturing value chain in Europe with sustainable battery cells at its core. To prevent a technological dependence on our competitors and capitalise on the job, growth and investment potential of batteries, Europe has to move fast in the global race. According to some forecasts, Europe could capture a battery market of up to €250 billion a year from 2025 onwards. Covering the EU demand alone requires at least 10 to 20 ‘gigafactories’ (large-scale battery cell production facilities).

Across EU MS the ability to transform research into profitable innovation varies considerably, this is a phenomenon named the “European Paradox”. The structural factors that are key in explaining this paradox according to Andrés Rodríguez-Pose (2014) are i) the quality of human capital, b) structure of economic fabrics, c) migration of skilled personnel and d) deficient institutional settings. Work package 3.4 of MONROE focusses on improving the representation of human capital and its link with R&I in the CGE models. The assessment of R&I policies will be more realistic because the CGE modelling framework will be able to capture the response of intangible capital accumulation in services, how it feedbacks into manufacturing productivity and how it interacts with the accumulation of human capital.

For more information on the “European Paradox”, see
Rodríguez-Pose, A., & Di Cataldo, M. (2014). Quality of government and innovative performance in the regions of Europe. Journal of Economic Geography, 15(4), 673-706.

For more information on the EU battery alliance, see