"To increase competitiveness in" or "to increase competitiveness on"?

Solution 1:

In is correct.

'On' in terms of a market means something for sale. You put your house 'on the market'.

Solution 2:

English is not my forte. But here is my two cents. IN is correct since competitiveness is an event that must occur in a population. In this case the population is the EU labor market

Change the word competitiveness to murderousness and it will be clearer. :)