Europe’s economic and geopolitical position hinges on its ability to translate tech ambitions into concrete outcomes. As digital technologies increasingly shape economic competitiveness, security, and societal resilience, Europe must scale innovation, reduce dependencies, and align regulatory and industrial policy with strategic goals. This roundtable explored the dilemmas Europe faces in balancing ambition with feasibility, and in moving from innovation to adoption.
Key takeaways:
Diffusion Over Innovation
- Europe does not face an innovation gap—academic research output is strong, particularly in AI.
- The core challenge lies in diffusion: China is rapidly deploying AI across sectors, while Europe lags in uptake and application.
- Widespread tech diffusion can itself become a catalyst for innovation.
Structural and Market Barriers to Scale
- European startups often relocate due to fragmented capital markets, limited scale, and burdensome compliance obligations.
- The single market remains inefficient for high-growth tech firms, with local market rules limiting cross-border expansion.
- Regulatory costs disproportionately affect SMEs, compounding Europe’s scale-up challenge.
Regulation: Values vs. Viability
- The EU has been a leader in rights-based tech regulation (e.g. AI Act, DSA), but several
voices raised concerns about regulatory overreach. - There were calls for a shift toward principles-based, outcome-focused regulation that allows
firms more autonomy in implementation. - Misclassification of low-risk applications (e.g., smart appliances) as high-risk AI systems was cited as a key inefficiency.
Industrial Policy and Strategic Infrastructure
- Speakers emphasized the need to build on existing infrastructure and private investment, rather than duplicating capabilities.
- Cloud adoption in sectors such as defence can free up critical resources for sovereign applications.
- Industrial policy should aim to enable access and accelerate uptake—not control ownership.
Supply Chain Resilience
- Europe remains highly dependent on adversarial states for critical raw materials.
- China controls the majority of refining and mining capacity for elements essential to AI, energy, and semiconductors.
- A coordinated strategy is needed to diversify supply chains and secure upstream access, possibly through an EU-led resource initiative.
Transatlantic Dynamics
- Despite political shifts, the US and EU remain aligned on digital competition, cybersecurity, and democratic norms.
- The transatlantic relationship must be reconceptualized around long-term strategic interdependence.
- Several participants endorsed the idea of a “Manhattan Project”-style joint initiative on AI and dual-use technologies.
The Role of Smaller States
- Countries like Estonia, Finland, and Denmark were highlighted as models for effective digital governance and public-private collaboration.
- Integrating private sector expertise into policymaking has enabled agility and innovation in these contexts.
Public Trust, Education, and Digital Inclusion
- Ongoing digital literacy efforts are needed to counter fear, disinformation, and societal resistance to AI.
- Lifelong education, particularly for older generations, was identified as critical to ensuring democratic resilience.
- Speakers emphasized the need to safeguard values while reducing the regulatory friction that limits competitiveness.
Proposed Solutions
- Launch a European-scale initiative to support dual-use and frontier technologies, inspired by the Manhattan Project.
- Introduce cross-border tax incentives and streamlined procurement for strategic tech sectors.
- Reform the regulatory design process to prioritize proportionality, clarity, and flexibility.
- Support public-private data and infrastructure partnerships, particularly in security-relevant sectors.
- Establish a resource security strategy focused on upstream access and ethical sourcing.
- Deepen transatlantic and global cooperation, particularly with democracies in Asia and Latin America, on critical tech and infrastructure.