Europe is only competitive in four of 14 technology domains and needs to close a €700bn investment gap, according to a new white paper from McKinsey and the World Economic Forum.
Carbon capture utilisation and storage (CCUS), circular technologies and engineered carbon removal makes the quartet, along with Quantum Computing, bioengineering and advanced connectivity, other sectors where the continent is leading based on investment and research.
But hydrogen, sustainable fuels, electrification and renewables were ranked lowly along with a range of others, including the future of mobility, AI and cloud and edge computing.
Semiconductors are borderline, but still in the lagging half, along with the future of robotics. In the global semiconductors value chain, the continent has limited scale across high-value segments, such as chip design for leading-edge nodes, and front- and back-end manufacturing.
Europe could consider defining chip procurement preferences for EU products and a new EU chips certification for public and private procurement tenders.
Source: McKinsey / World Economic Forum
Competition is rising with the US, whose Department of Commerce (DOC) recently unveiled a $1.4bn programme to accelerate the development of advanced packaging for semiconductors, part of its CHIPS for America initiative.
Read more: US unveils $1.4bn boost for semiconductor innovation
Europe’s technology gaps threaten to leave €2-4trn on the table through foregone GDP contributions per annum by 2040, exceeding the continent’s current annual funding for Net Zero, defence and healthcare combined.
The European Commission has requested consultations at the World Trade Organization (WTO) aiming to ‘remove unfair and illegal trade practices by China in the sphere of intellectual property’.
“China has empowered its courts to set binding worldwide royalty rates for EU standard essential patents, without the consent of the patent owner,” the Commission states.
“This pressures innovative European high-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly.”
Last month, The European High Performance Computing Joint Undertaking (EuroHPC) selected seven proposals to establish the first AI Factories across Europe.
The factories, earmarked for Spain, Italy, Finland, Luxembourg, Sweden, Germany and Greece, will represent a €1.5bn investment, combining national and EU funding. Half will be funded by the EU through the Digital Europe Programme for AI infrastructure and Horizon Europe for AIF services.
Two years on from the energy price crisis and US’ Inflation Reduction Act, the European economy is still reeling. Growth in EU economic output stood below 1% in 2024, while public debt remains high.
