In the twenty-first century, technological innovation is driving geopolitical, economic and military competition. The US and China are leading the field. The risk of an emerging global bipolar technology environment is looming; one that could force third countries to come down on the side of the US or China. Europe is lagging behind in the global tech race and faces an uphill battle in its attempts to remain competitive.

The findings in this study show that Europe has quite a way to go if it wants to become as competitive as the US or China. In particular, European stakeholders from the private and public sector as well as civil society are worried about the EU’s overdependence on foreign-owned technology providers. These concerns are particularly acute in the realms where Europe does not have a strong indigenous industrial base, such as in cloud computing (76 percent express concerns), artificial intelligence (68 percent), and to a lesser extent by 5G mobile technology (54 percent).

It makes a difference whether the EU is reliant on the US or China. The majority of stakeholders surveyed say that the EU relies most on the US for key technologies including artificial intelligence (80 percent) and cloud computing (93 percent) but also blockchain, high performance computing, and the internet of things (IoT). Only in 5G and mobile networks did respondents identify a larger dependency on China (65 percent). A slim majority (54 percent) believe the EU should chart an independent path between the US and China while 46 percent believe the EU should move closer to the US.

According to the stakeholders surveyed, the EU’s lack of first-mover advantage and absence of dominant home-grown tech players (such as Google, Microsoft, Amazon, and others) are the central obstacles to its capacity to act. But the EU does have levers it can use to turn the tides in its favor. When surveyed on the instruments available to Europe, stakeholders ranked the top four as: access to the EU market; global regulatory power; standard-setting; and data access and control.