Europeans are increasingly afraid of their dependence on foreign digital technology, with a recent Bertelsmann Foundation poll finding nearly three-quarters of EU citizens worry critical digital services could be remotely disabled by actors outside Europe. The same majority believes Europe must have control over key digital technologies. Europe depends on the US for software, Taiwan for microchips, and China for hardware.
Henna Virkkunen, European Commission vice-president for tech sovereignty, lists AI models, semiconductors, quantum technology, satellites, and the cloud as areas needing domestic capacity. The objective is avoiding risky dependencies on a single third country. Brussels acknowledges that homegrown alternatives are sometimes smaller and lesser known rather than inferior in quality or price.
The public sector can catalyse domestic substitutes by acting as a customer, though many EU-based digital companies feel government customers prefer established big providers. Virkkunen admits there is inertia but says being "creative" to facilitate smaller companies in consortiums is needed. The biggest challenge is access to funding for risky EU ventures.
EU institutions and member states are starting to remedy this with a new scale-up fund and aims for more public-sector strategic "anchor" equity to attract private investment. However, amounts mobilised so far seem far too small compared to hundreds of billions invested in US tech annually. Budget talks for the next multiyear budget are reportedly reducing proposed funds for digital industrial policy.
Legislative reforms, including "EU Inc" and localisation rules, are being delayed or watered down by member states.
Source: Financial Times Companies · Summarized by HeadlinesBriefing