Europe is competitive in only four of 14 technology areas and needs to close a €700 billion investment gap, according to a new study. white paper from McKinsey and the World Economic Forum.
Carbon capture, utilization and storage (CCUS), circular technologies and technical carbon removal make the quartet, along with quantum computing, bioengineering and advanced connectivity, other sectors in which the continent is a leader in terms of investment and research.
But hydrogen, sustainable fuels, electrification and renewable energy were ranked low on the list, among a range of others including the future of mobility, AI, cloud and computing cutting edge.
Semiconductors are on the edge, but still behind schedule, as is the future of robotics. In the global semiconductor value chain, the continent has limited scale in high value-added segments, such as chip design for edge nodes and front-end and back-end manufacturing.
Europe could consider setting chip purchasing preferences for EU products and new European chip certification for public and private tenders.
Source: McKinsey / World Economic Forum
Competition is intensifying with the United States, whose Department of Commerce (DOC) recently unveiled a $1.4 billion program aimed at accelerating the development of advanced packaging for semiconductors, as part of of its CHIPS for America initiative.
Learn more: US unveils $1.4 billion boost for semiconductor innovation
Europe’s technology gaps threaten to leave €2-4 trillion on the table due to the annual shortfall in GDP contribution by 2040, which would exceed the continent’s current annual funding for net zero, defense and healthcare combined.
The European Commission has requested consultations from the World Trade Organization (WTO) aimed at “eliminating China’s unfair and illegal trade practices in the area of intellectual property”.
“China has empowered its courts to set globally binding royalty rates for essential patents that comply with EU standards, without the consent of the patent holder,” the Commission says.
“This is pushing innovative European high-tech companies to lower their prices globally, giving Chinese manufacturers unfair access to these lower-cost European technologies. »
Last month, the European Joint Undertaking for High Performance Computing (EuroHPC) selected seven proposals aimed at establishing the first AI factories in Europe.
The factories, destined for Spain, Italy, Finland, Luxembourg, Sweden, Germany and Greece, will represent an investment of 1.5 billion euros, combining national financing and Europeans. Half will be funded by the EU through the Digital Europe program for AI infrastructure and Horizon Europe for AIF services.
Two years after the energy price crisis and the US Inflation Reduction Act, the European economy is still in shock. EU economic output growth was less than 1% in 2024, while public debt remains high.