How Did We Fall Behind? From Champions to Losers

As an increasing number of companies innovate and develop advanced technologies, Europe appears to be caught between two dominant models of technological development: the American model, centered on Silicon Valley, and the Chinese model, based on Beijing. The United States dominates through global digital platforms, which provide the data and the infrastructure needed to train large language models as well as through broad access to venture capital, and advanced computing infrastructure. When it comes to China, in turn, the country competes through domestically developed AI models, a vast internal market, and coordinated state support. Compared to these two major actors, European competitiveness remains limited, both in terms of platforms and technological infrastructure, and due to a restrictive regulatory framework combined with fragmented and difficult-to-access funding mechanisms. Although certain advanced European regions are still locked into activities at the technological frontier, they remain weakly interconnected, while most regions are still locked into activities characterized by low levels of economic complexity. The absence of an integrated European strategy has turned the European Union into an intermediary actor in the global competition for technological leadership - more of a consumer and regulator of technologies developed outside the continent than an innovation leader, as it once was.