The EU's single market "must be adapted to the realities of the 21st century" if it is to respond to the challenges of increasing global competition, energy dependence, climate change and ageing populations, Barroso told business leaders at the European Business Summit on 15 March 2007.
"We must make markets function smoothly for Europe's citizens, consumers and businesses," Barroso explained, saying that a review of the EU's internal market currently under way will seek to "oil the mechanism".
But he added that internal issues are not enough and pleaded for strengthening relations with Europe's main trading partners, in particular the US.
"Just to give you a figure: total US investment in China last year was just one fourth of total US investment in Belgium in 2005," he pointed out.
Barroso said that he would seek to build even closer relations with the US at a summit scheduled for 30 April in Washington DC. "I am actively working with Chancellor Merkel to make concrete steps towards the creation of a transatlantic economy in the next EU-US Summit," he said. He singled out regulatory and standards convergence as key areas for deeper co-operation, saying the measures would "help both sides of the Atlantic better to shape globalisation".
Turning to energy and climate-change policy and the EU's new ambitious target to reduce greenhouse-gas emissions, Barroso urged business to "think dynamically".
"European business must seize the opportunity to become the world leader in clean-energy technology, and to use this to power growth and job creation," he said, reaffirming his belief that Europe "can take the lead to a new industrial revolution to a low-carbon economy."
But this may be a tall order for Europe, as it faces increasing competition in the market for clean-energy technologies, particularly from the US.
"We need to know what the competition is doing," said Jorma Ollila, chairman of the board of directors at Shell and Nokia, and chairman of the European Round Table of Industrialists, pointing out that the US is "today spending five times more than Europe on energy research".
"This gives an idea that we have to set our minds to long term R&D efforts," Ollila added.