Three reports ask where Europe can build technological strength, how funding needs to change and where international openness may face limits.
A recent EU report reveals an uncomfortable truth: Europe faces not one innovation problem, but two.
In recent years, Europe has often been described as a global leader in research whose main weakness is translating that research into innovation. A new study on strategic digital technologies for EU research and innovation funding beyond 2027 challenges this narrative and adds a new layer. While the EU leads in the overall volume of scientific publications across most of the digital technologies examined, it falls behind the US and China in highly cited research in many fields. European research therefore does not consistently reach the global technological frontier. And even where Europe produces excellent research, it struggles to capture the resulting value. The latter problem is well known but the report illustrates it with new numbers: the study finds that around 55% of patent citations to ERC-funded science come from US patents, compared with less than 10% from European ones. This helps explain its call for stronger safeguards around critical intellectual property beyond the lifetime of EU-funded projects, but more on that later.
The timing of the report is essential. The study was commissioned by the European Commission’s Directorate-General for Communications Networks, Content and Technology (DG CNECT) to inform future investment in critical digital technologies under the next EU budget. It is complemented by a second study looking at deployment and market uptake and a third expert report examines how strategic intelligence can help Europe identify emerging and critical technologies in the first place. Cutting through three extensive studies, a common thread emerges: the journey from spotting a technological opportunity to developing and ultimately deploying it in Europe.
The first step on this path is anticipation. As Europe is falling behind on frontier research, identifying emerging technological opportunities early becomes all the more important. Catching up once technological leadership is established is arguably much more difficult than recognising promising fields while they are still young. Yet, the expert report argues that Europe currently does this mostly through ad-hoc insights and one-off exercises, hence the Commission’s proposal to establish a dedicated observatory for emerging and critical technologies under the next Multiannual Financial Framework 2028-34. They propose to look for existing capabilities in Europe that could be recombined into new strengths, as well as strategic control points and dependencies in their value chains. The resulting intelligence could then inform a choice Europe cannot avoid: it cannot expect to establish leadership across every emerging technology.
This is also where the DG CNECT study proposes a more pragmatic understanding of technological sovereignty. Rather than seeking European control over the entire technology stack, its concept of “modular sovereignty” focuses on strategically important layers where Europe can realistically establish capabilities while relying on trusted partners elsewhere. But that choice does not concern technological development alone. The companion study applies a similar strategic lens to deployment, asking where European capacity building is needed to bring critical technologies into use. Control also does not necessarily require ownership, as the example of open source shows. European actors can retain a degree of technological control through their ability to access, modify and deploy critical technologies.
Choosing priorities therefore cannot mean putting technologies into separate boxes. AI, quantum and photonics increasingly depend on each other and on shared capabilities such as semiconductors and energy efficient computing, meaning that one bottleneck can constrain several technologies at once. The study consequently suggests cross-technology portfolios for Horizon Europe, which could be adjusted as new strengths and dependencies emerge.
Once these choices translate into funded research, the next challenge is keeping promising technologies moving towards application. The study identifies a particular weakness when technologies move towards prototype validation, system integration and demonstration in realistic environments. It therefore calls for more prototypes, pilots and lab-to-fab pathways, but also for better use of existing technology infrastructures, some of which have received significant investment but remain fragmented, underused or difficult for SMEs to access. Its companion study follows the journey out of the lab and finds that reaching technological maturity is no guarantee of widespread use. Deployment remains uneven across the European economy, hampered by high upfront costs, limited access to finance, legacy IT systems and differing national rules.
But even successful deployment leaves one final question along the journey: who ultimately controls the technology and captures its value?
It is suggested that funding could become more phase-sensitive: bottom-up and exploratory at an early stage, and faster and more flexible as technologies approach scaling. Shorter time-to-grant, rolling cut-offs and challenge-driven calls are among the mechanisms proposed. For Switzerland, the reports’ approach to international cooperation is particularly relevant: early-stage research should remain broadly open to international partners, while strategic considerations would gain weight as sensitive technologies move closer to deployment. The more technologies mature, the report argues, the greater the attention should also be paid to who ultimately controls them. It raises concerns about critical intellectual property and capabilities leaving European control after EU-funded projects end.