Technology gap sees corporate Europe lagging behind

European firms lack the scale and agility they need to compete with their US and Chinese counterparts. Policymakers should embrace 'transversal technologies' that are crucial to the region’s future prosperity

Europe has long been aware of its technological shortcomings and has recently launched a flurry of initiatives aimed at putting the region on a higher-performing path.

Europe seems to change most decisively as a result of crises. The European Union was created in the aftermath of World War II. The 2008 global financial crisis and the eurozone crisis that followed led to more financial cooperation among European countries. The Covid-19 pandemic triggered greater fiscal coordination through the Next Generation EU recovery fund. Now the war in Ukraine is upending Europe’s energy strategy and sparking a new conversation about defence.

In this context, policymakers must not forget another slow-motion crisis: the significant lag in European companies’ technological prowess, relative to other leading economies. As technology spreads into every sector and reshapes competitive dynamics, innovation and tech leadership is as pivotal to the EU’s strategic autonomy as energy supplies or defence are, especially amid increasing geopolitical turbulence.