Investments, skills, and international cooperation are the key ingredients for EU tech sovereignty

By Riccardo Masucci, Director of Security and Technology Policy at Intel

The digital revolution and the recent geopolitical developments have widened the aperture of what technological sovereignty, or strategic autonomy, mean to Europeans. The pressure on global supply chains from the COVID-19 pandemic reinforced the notion among policymakers that Europe should provide for itself in fields of critical and developing technologies.

Drivers for such sovereignty include secure and resilient supply chains, boosted economic competitiveness, and the creation of a greener, more digital society. In Brussels and other European capitals, this is manifesting in political stances and legislative proposals to build something Europe can call its own. However, the lessons learned from the recent supply chain challenges should not push the EU towards protectionist approaches. Instead, Europe needs to attract innovative investments to rebalance global supply chains, educate the next generation of tech talents to shape a more sustainable and digital future, and align on policy strategies with likeminded partners.

In these unprecedented times, it would be valuable to reflect on how global supply chains function. We have learned that regional supply chains could be made more robust in such a way that events like pandemics and wars don’t throw entire sectors into disarray. Maintaining global structures while addressing what is needed to shore up regional ecosystems also allows investments where it’s most needed. Public funding combined with private investments is essential to accomplish successful industrial policies. Favorable and predictable regulatory frameworks, offering incentives and fast-track procedures, reassure investors. In turn, this will build the resilience of interlinking industries, shifting away from a mindset that has long been focused on cost efficiency: it’s time to move from ‘just in time’ to ‘just in case’ supply chains.

In areas such as semiconductor R&D or fab equipment, Europe stands at the pinnacle, enabling the tech developments of tomorrow and outperforming other global economies. However, to strengthen other segments of the semiconductor supply chain where the EU has experienced a steady decline, such as chip design and manufacturing, it is of utmost importance to foster more investments and skills.

Private investments benefit from the presence of infrastructures and industry, as well as from public support. Not all countries in the EU have the same means to develop a competitive semiconductor ecosystem. But achieving tech sovereignty ambitions translates also to the opportunity for each Member State to work towards equipping talent with the skills needed for future innovation and tech leadership. Skills creation is the foundational layer of every industrial policy to promote jobs, economic growth and to address the twin transition. The announcement of 2023 as the European Year of Skills shows the urgency of policy initiatives to advance deep tech skills to keep up with the speed of developments in semiconductors, AI, HPC, quantum computing, clean tech.

Investments and skills can position the EU for success, but international cooperation is vital to the EU long term resilience and competitiveness. The semiconductor industry, at the core of the digital society we live in, is becoming a test case for how economies can reduce the risk of future shortages by rebalancing supply chains. Chips are a gathering point in a renewed transatlantic relationship through the EU-US Trade and Technology Council: a specific workstream on semiconductors confirms the potential for a true transatlantic semiconductor ecosystem.  Both the European Union and the United States are facing similar industrial challenges and have taken similar legislative initiatives – the EU Chips Act and the US CHIPS Act – to reinvigorate the semiconductor sector by filling the gaps in R&D, chip design and manufacturing.

Chips are perfect example of how complementary investments, standards harmonization, and emergency measures coordination are all part of the ideal policy toolbox that will stabilize global supply chains while also ensuring technology leadership. The innovations of the semiconductor industry are key for creating a greener, more digital tomorrow, so there is no choice but to work together.

This blog reflects remarks made at the Considerati Policy Primer event held on October 12, 2022 at the Mauritshuis in The Hague, the Netherlands, which brought together high-level policymakers, politicians and business leaders to reflect on digital policies.