By Salomé Beyer Vélez 

While the U.S. government has focused public discourse on the deregulation of technology and “America-first innovation”, and a recent rare convergence between the Chinese private and public sectors has prompted conversations on how state-led innovation efforts can support those private ones, the EU has opted for a middle path. 

Far from U.S. Senator Ted Cruz’s “Sandbox” artificial intelligence (AI) legislative proposal- which seeks to simplify regulation for American AI developers- and from China’s “politically correct” and investor-centered Private Economy Promotion Law, the Commission’s recently-announced strategy decisively reinforces its members’ commitment to research and technology infrastructures. 

The unnamed plan of action’s ultimate goal is ensuring that “scientists, researchers, innovators, and industry have easy access to Europe’s cutting-edge facilities,” data, and services, encouraging stakeholders to “Choose Europe”- another of the Commission’s Strategies to attract and retain top global talent. 

Beyond its flashy language and promise, the strategy urges wider questions: what does this mean for EU business leaders? And how should they react? 

The Strategy’s Pillars 

According to commissioners, the strategy was designed to follow the recommendations of the “The Future of EU competitiveness” and the “Align, Act, Accelerate” reports, both of which stressed the importance of technological innovation and digitalization in revamping the EU’s global competitive advantage. 

The former report, authored by renowned economist and former president of the European Central Bank Mario Draghi, warned that digitalization was critical for all EU industrial and service sectors, while tools like AI had become essential for the delivery of public goods, like health, justice, education and environmental protection. 

Europe’s strategic autonomy, Draghi claims, is threatened by geopolitical competition and third countries’ aggressive industrial policies on tech-rich exports, which has left the EU’s industrial model unreflective of the current pace of technological change. 

The latter report, however, recommended the alignment between research, innovation policies, and the EU’s strategic agenda, as vital to secure Europe’s position in the novel race for a clean and digital economy. The third-party’s overview also noted that Europe must regain its position as globally-competitive, secure, sustainable and resilient via “more excellent research, impactful innovation, and technology scale-ups.” 

With this, the new EU identifies five key areas of improvement: research and technology infrastructure ecosystem; access to research and technology; attracting and cultivating talent; improving governance frameworks; and strengthening international dimension of infrastructures. 

Within this framework, the EU is also betting on the maximization of AI’s potential across infrastructures, encouraging the continuum of complementary services for innovators- including startups and scaleups- and furthering the “Choose Europe” approach. 

“An ambitious and coordinated European approach to research and technology infrastructures is crucial for us to remain a global leader in excellent science and in technology innovation,” noted Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation. 

“With our new strategy we will ensure that scientists, researchers and innovators across Europe, including startups and scaleups, have easy access to state-of-the-art facilities and tailored services to develop and test their products and services,” she added. 

Europe’s “Middlepath” 

Regardless of the innovative boost that the strategy supposes, the EU still faces pressing challenges ahead, including fragmented markets, uneven digital adoption, and the hardships faced by leaders when seeking cross-border venture scaling. 

According to the European Centre for International Political Economy (ECIPE), Europe is “caught in a protracted corporate and technology crisis,” tailing behind U.S. innovation leadership while China’s tech-intensive imports get increasingly intense. Europe’s fragmentation across 27 markets remains “ignorant to dynamic effects of competition, especially investments in innovation,” as per ECIPE.

The region’s lagging venture capital (VC) funding, on the other hand, further aggravates its global innovative incidence; the average VC fund size in the EU is $128 million USD, compared to the American $282 million USD. 

For European entrepreneurs, this gap has tangible consequences: fewer funding opportunities results in less unicorns, slower scale-up capacities, and a continued reliance on U.S. investors, and nearshoring alternatives that do boost talent, but elsewhere. 

The chosen middlepath, highlighting human-centered tech and digital sovereignty, however, is to be strengthened by the recent strategy. Its fourth pillar, for one, includes empowering coordination across funding sources, and aligning the priorities of EU member states with those of third-countries. 

Its link with existing EU initiatives further propels its potential impact, especially via the EU Startup and Scaleup Strategy, the AI Act, the European Innovation Act, and the European Research Area Act.

Within this move, the EU’s transversal approach to sustainability- a focus on green and climate tech and aligning innovation with ESG goals- across the strategy’s pillars, objectives and plan of action set it apart from global competitors, who have either deprioritized environmental concerns or failed to acknowledge them altogether in their innovation plans, like the U.S. and Russia, respectively. 

Final thoughts  

If effectively employed, and embraced by members, the EU’s strategy to strengthen research and technology infrastructures poses deep transformation across industries. For one, new funding streams, including deep tech, green tech, and digital infrastructure are sure to emerge in the context of simplified bureaucracies and a diversified funding landscape. 

Business leaders, on the other hand, have countless new opportunities. Early compliance with the strategy can evolve into a competitive edge as the European model becomes increasingly replicated- as has happened with the AI Act. 

Simultaneously, the push for a refreshed strategic autonomy on goods and services promises to reduce European dependence on the U.S. and China, while tracing the path for new markets. And finally, the Commission’s emphasis on public-private collaboration and convergence encourages companies to return to work with universities, research institutes, and EU-backed projects to accelerate innovation, fostering a cycle in which European companies boost education just as the EU boosts their capabilities and opportunities. 

In this new European tech-driven chapter, leaders will find success when hinging on agility, partnership, and the early adoption of EU-funded programs. However, policymakers still face urgent tasks: reducing bureaucracies, attracting talent, boosting private capital, and ensuring that the strategy is embraced by 27 nations. The real question, then, is whether Europe is ready to turn strategy into action.  

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