Competitiveness Compass outlines vision for Europe’s digital future

An initiative aimed at reinforcing competitiveness as a fundamental principle for the European Union, the Competitiveness Compass, was launched by the European Commission on 29 January. The Competitiveness Compass presents a strategic vision for Europe's future, emphasising the importance of competitiveness in fostering innovation, advancing technology and driving economic growth. Influenced by the report on The Future of European Competitiveness by Mario Draghi, the former European Central Bank President, the Compass outlines three elements to boost competitiveness: bridging the innovation divide, creating a shared roadmap for decarbonisation and competitiveness, and reducing excessive dependencies whilst enhancing security.

Strategic priorities for tech sector

The Compass underscores the importance of Europe excelling in the technologies that will define the future economy. As scaling up becomes less challenging, Europe needs to ensure the right conditions are established for advanced technologies to thrive. According to the European Commission, this includes leading in innovative tech sectors such as AI, semiconductors and quantum technologies, advanced materials, biotechnologies, clean energy technologies, robotics and space technologies, in addition to connected and autonomous mobility.

In the Commission’s view, Europe has already laid the groundwork for companies to develop and deploy digital technologies within the Single Market through measures like the Data and Data Governance Acts, the Cyber Resilience Act and the AI Act. The focus should now shift towards nurturing tech talent and promoting world-class industrial development in the EU to harness the productivity gains from technology. To become a leader in the AI sector, the Compass states that Europe needs robust computing, cloud and data infrastructures. The Commission is preparing an “AI Continent Action Plan” to be launched later this year, which will establish AI Factories across Europe, using nine supercomputers to enhance Europe's computing power and make it accessible to start-ups, researchers and industry. This action plan is expected to help leverage the benefits of aggregation and network effects at European level.

Furthermore, the forthcoming “EU Cloud and AI Development Act” is designed to mobilise both public and private initiatives to establish new AI Gigafactories, specialising in training large AI models. The Act is also expected to set minimum criteria for cloud services offered in Europe, complementing support for chip design and manufacturing, including cutting-edge AI chips. Understanding that the availability of large and high-quality data is essential for developing AI, the Commission is also due to propose a “Data Union Strategy” to enhance secure data sharing between private and public entities, simplify the regulatory regime, and accelerate the development of new systems or applications.

Securing a leading position in quantum technologies, which the Commission believes has the potential to revolutionise digital encryption systems, health scanning, drug discovery and business transactions, will also be a priority for the EU. “A Quantum Strategy” and a “Quantum Act” will build on the existing EU Chips Act to address regulatory fragmentation, align EU and national programs, and support investment in pan-European quantum computing, communication and sensing infrastructure.

EU-wide coordination and support for AI vertical use cases and AI for science would be ensured via a “CERN for AI”, in reference to the European Organisation for Nuclear Research. The Compass states that the European Research Council and the European Innovation Council need to operate in their respective domains according to the same strategic interests, while cooperating more closely to achieve results.

According to the Compass, the digitalisation of public services and the integration of AI into the public sector will also enhance competitiveness. Overall, closing the innovation gap between the EU and other regions will require investment in state-of-the-art digital infrastructure, including modern fiber networks, wireless and satellite solutions, and investments in sixth-generation technology for wireless communications (6G) and cloud computing capabilities.

In conclusion, the Competitiveness Compass underscores the need for collective action from all stakeholders, including EU institutions, national governments, regional authorities and corporations, to achieve sustainable prosperity. It outlines pathways for Europe to strengthen its innovative tech sectors, integrate AI into strategic sectors and enhance its digital infrastructure. However, the onus now lies on Europe to leverage its strengths, meet its 2030 Digital Decade targets, and transform this strategic vision into a reality.