Europe and Artificial Intelligence: The Cost of Regulating a Market We Are Not Building

At the beginning of the 1980s, when I started working as a political adviser at the European Parliament, I followed the work of the committees dealing with industry, energy and research. It was a formative period. The European Community was beginning to understand that research policy could no longer be treated as a marginal academic matter. It had to become part of industrial strategy.

I remember a young German senior official in the Commission services dealing with the emerging field of information technology — at the time when Europe was preparing what would later become the ESPRIT programme — warning us that Europe was already missing the major trains of technological innovation. Consumer electronics, video recorders, television screens, personal computers and early digital technologies were moving elsewhere. The United States and Japan were turning innovation into industrial power. Europe was discussing programmes, procedures and coordination.

The European Commissioner for Industry at the time was Étienne Davignon. He understood the strategic importance of that warning, supported the young official’s work, and helped transmit the message across the European institutions: unless Europe acted at scale, it would become dependent on technologies developed, manufactured and commercialised elsewhere.

That warning has stayed with me for more than forty years because it was not wrong. It was early.

Many other voices have been added to that warning over the past forty years. The latest, and perhaps one of the most authoritative, is Mario Draghi, former President of the European Central Bank and former Prime Minister of Italy. In his report to the European Commission on the future of European competitiveness, Draghi denounced Europe’s growing innovation gap, its weak productivity growth, its excessive fragmentation, and its dependence on external suppliers in key strategic technologies.

The message is strikingly similar to the warning we heard in the early 1980s. Europe does not lack intelligence, scientific talent or regulatory capacity. What it lacks is the ability to transform technological opportunities into large-scale industrial power. Draghi’s report makes the point with unusual clarity: without faster innovation, deeper capital markets, lower energy costs, stronger industrial coordination and much larger investment, Europe risks falling further behind the United States and China in the technologies that will define the next economic cycle.

Europe has had important successes, but the structural pattern has too often remained the same. We have been excellent at science, standards, regulation and engineering niches. We have been much weaker at transforming technological waves into large-scale industrial ecosystems.

GSM was a European success as a standard. But Europe did not retain control of the next layers of value: smartphones, mobile operating systems, app stores, digital platforms, cloud infrastructure and data ecosystems. European companies that once mattered in phones, consumer electronics, displays and digital equipment progressively disappeared, were absorbed, or became marginal in the most profitable parts of the value chain.

Airbus succeeded because it was not only a research project or a regulatory problem. It was a political-industrial project backed by states, procurement, engineering, financing and a clear strategic objective: Europe needed a civil aircraft champion capable of competing with the United States.

Now the same question returns with artificial intelligence: Will Europe once again regulate a market that others are building?