Riccardo Bosticco
Control over key technologies and supply chains has become the strategic mantra of our time. But if national security logics keep crowding out economic ones, the promises of resilience will end up in economic loss. To reconcile security and economic competitiveness, asking the right questions is crucial: what role do economic interdependences still play in today’s global economy, and how can we expect them to evolve? The European Union (EU) has still to confront these questions. The global competition over technology––fueled above all by the transformative power of artificial intelligence (AI)––has spurred a frenzy of policy initiatives in the pursuit of the Union’s strategic autonomy and digital sovereignty. As of 2024, the EU imported 80% of its digital products, services, and infrastructure. The vast majority of chips used in the EU are designed in the United States (US) and manufactured in Korea, Taiwan, or China. The EU, alongside Japan, retains advantages in materials and equipment, but when it comes to AI more specifically, it is almost entirely dependent on American-designed hardware and cloud platforms.
Despite the future of technological relations with Beijing remaining unclear, Washington has been explicit: technological supremacy is a national security imperative, and the US must be the ruler of the emerging AI world. China, meanwhile, leveraging a maturing innovation ecosystem, can count on a vast domestic market and control over the global supply of critical raw materials. Additionally, China takes advantages in the prolongation of Russia’s war on Ukraine and the tests that it poses to the unity of the West. The EU sits uneasily amid great powers and their attempts to reconfigure the international system: still unprepared to take care of its own defence, it is fractured inside – and when it comes to digital technology, it is indispensable in certain niches but lacks the scale to compete.
Should Europe attempt to replicate global supply chains at home? Leaders have not yet answered this question. But the real problem is that this option would lie on a shaky assumption. In particular, that building digital sovereignty would be cheap and fast enough to make Europe withstand imminent external threats and internal fractures. Yet, building autonomy would require enormous economic resources – nearly €300 billion – that could conflict with overlapping challenges the EU faces, from military spending to ensuring climate resilience. Moreover, it will probably take too much time for Europe to replicate the equivalent of 80% of its digital imports. Estimates indicate nearly 10 years would be required. According to the European Court of Auditors, the EU is not even on pace to achieve the objective, included in the Chips Act, to produce 20% of global microchip by 2030.
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