The EU’s coming political cycle will be no less testing than the previous one, as many of Europe’s fundamental assumptions are being challenged. This is the case in security and defence, but also more widely in regard of the global order, international economic relations, trade and technology, and even democracy. The speed of change is staggering. Changes that we thought might come in decades are happening now, as we see both in climate change and AI. The long term has become the near term.
Any suggestion that the next European Commission could be an “implementing Commission” is misguided. The passing legislature signed off on landmark new initiatives, such as the Digital Markets and Digital Services Acts and the Artificial Intelligence Act – which must be properly implemented – but there is no room for complacency. In the area of digital and tech in particular, the EU is facing a race not only to implement but also to innovate, adopt and regulate further.
Technology underpins both future prosperity and security. To meet emerging security challenges and deliver on the “triple” green, digital and economic security transitions, the EU must put the boosters on its technological competitiveness agenda. In today’s geoeconomy, the control over resources and value chains, together with the ownership of chokepoint technologies and scale, convey “strategic indispensability” and power. As China builds up its geoeconomic heft and means of coercion, and with an uncertain ally in Trump’s America, Europe must build up its positions in critical value chains and emerging and disruptive technologies.
This requires investment into technological forecasting, research and development as well as scaling. Europe has the talents, cutting-edge research capacities and promising ecosystems in clean tech and emerging technologies, such as quantum and biotech. These ecosystems often do not find fertile ground to develop and grow further into mature industries and international positions. When sufficient investments or risk appetite are not available, Europe’s start-ups wither or move abroad.
Technology underpins both future prosperity and security
For over a decade, Europe has talked about fixing its capital markets, with limited progress. In parallel, a much stronger public financing infrastructure is needed to crowd in private investment and alleviate risk. An EU sovereignty fund or ‘Futura fund’, in the hundreds of billions of euros, is needed to support Europe’s tech-industrial agenda. The EU’s current industrial alliances and recently launched ‘AI factories’ are first attempts at developing deeper public-private partnerships, but their objectives, mandates and means of action must be strengthened.
Competition policy also has a significant role to play. The Commission’s current approach places a disproportionate emphasis on short-term efficiency and consumer effects at the expense of broader objectives such as innovation. Strong antitrust enforcement remains paramount to ensure open competition in particular in the digital field where Big Tech has benefitted from network effects and gatekeeper positions to consolidate monopoly or near-monopoly positions.
The EU’s regulatory action is far from over, but striking down current and future monopolies does not preclude developing close partnerships with business. As seen in the response to Russian cyberattacks in Ukraine, Europe’s cybersecurity depends on close working relationships with essential technology and service providers. At the same time, Europeans should not be shy of defining their own economic security interests, with unfinished files such as cloud certification and the announced EU space law standing as important test cases in the coming mandate. In terms of partnerships, the EU must look across Brussels and beyond its borders. The NATO Innovation Fund and NATO’s accelerator programme DIANA are examples of where complementarity with the EU’s own efforts can be found in pushing technological leadership.