Europe must foster innovation and stick to green energy targets to compete successfully in the next decade, the European Commission says.
The Europe 2020 strategy replaces the EU's Lisbon Strategy, which failed in its aim to make Europe the most dynamic knowledge-based economy by 2010.
The commission says the EU should invest 3% of GDP in research and development and aim for "smart" growth.
Asian competitors have taken market share from many European businesses.
Commission president Jose Manuel Barroso said the global financial crisis of the past 12 months had simply "wiped away" much of the growth and employment generated by the European economy in the past decade.
"We need to invest in smart, sustainable and inclusive growth. We need to concentrate our efforts on the most important levers," he said, warning against spreading EU resources too thinly.
The EU is seeking ways to get more young people into jobs
The commission - the EU's executive arm - has set the 27 EU member states targets including:
75% of the population aged 20-64 to be in jobs
Share of early school leavers to be under 10% and at least 40% of younger generation should have degree or diploma
Speed up roll-out of high-speed internet connections
20 million fewer people to face risk of poverty
"It is not acceptable in the modern age that nearly 80 million people in Europe live under the poverty line," Mr Barroso said.
The commission says that launching an EU-wide patent system could save companies 289m euros (£262m; $392m) annually. So far no target date has been set for such a system.
European firms face translation costs of about 3,000 euros on each patent, making them 13 times more expensive in the EU than in the US, the commission says.
It adds that sticking to the EU's low-carbon energy targets would save 60bn euros in oil and gas imports by 2020.
The BBC's Europe business reporter Nigel Cassidy says that delivering economic growth in the face of spending cuts and continued anxiety on the debt and currency markets, is not going to be easy.
The commission consulted some 1,500 businesses and organisations before presenting the blueprint, he says.
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