Europe in the Intelligent Age 2025

Europe could benefit from sharpening strategic postures per technology FIGURE 4 Nascent Scaling Fully scaled Lagging Partially competitive Undisputed leader Climate tech Future of bioengineering Future of robotics Future of space technologies Future of mobility Immersive reality technologies Cloud and edge Digital trust and cybersecurity Next-generation software development Electrification and renewables AI Quantum technologies Advanced connectivity/uni00A0 Semiconductors Assessment of European position in 14 significant technology domains Secure access, adoption and capability transfer Global technology maturity (Global technology maturity life cycle) Europe’s starting position in 2024 (Based on investments, publications, patents and expert judgement) Cement global leadership Pick the right battles and leapfrog 3 4 2 1 Reach maturity and commercialization, and scale fast Global market size by 2040² Size High Strategic importance¹ Low 1. Contribution to European sovereignty (based on analysis of import/export tariffs) 2. Market size by revenue based on estimates in MGI reports “The next big arenas of competition” (2024) and “Securing Europe’s competitiveness” (2022) Source: McKinsey, MGI, expert interviews The same approach can then be applied at the value chain level within each technology domain to identify concrete opportunities for action based on Europe’s competitive position. For each of these technologies, the business case of key investments (e.g. building out semiconductor manufacturing) should be assessed to clarify which factors make it uncompetitive versus other regions. This will allow for targeted actions to remove barriers and reduce the impact of these factors. This paper offers deep dives into value chain opportunities for four technologies, one for each position in the matrix – advanced connectivity, quantum technology, AI and semiconductors – as examples of this approach. Corporate and policy leaders may benefit from tailoring their strategic posture in line with such assessment: 1. Cement global leadership for scaled up technologies where Europe has at least partial leadership positions, such as parts of the advanced connectivity and semiconductor value chains. This could include creating demand for Europe’s own products by incentivizing corporate investments, e.g. in private wireless, and thus driving adoption and growth in high potential tech products with competitive margins. Companies could benefit from deploying programmatic M&A approaches, e.g. consolidating programmatic semiconductor R&D in new materials for optical and power electronics as well as semiconductor equipment for the most advanced nodes. Policy-makers may wish to enable domestic and EU-wide adoption; facilitate the growth of large-scale companies successful in global markets – rethinking protecting against domestic concentration at the expense of achieving global scale at competitive prices; or pursue commercial diplomacy for global market access and working towards global standards that support European strengths. 2. Reach maturity and commercialization, and scale as fast as possible in nascent technologies where Europe is well positioned to lead, such as parts of quantum, climate tech and bioengineering sectors. Europe in the Intelligent Age: From Ideas to Action 11