Case studies: Exploring the potential across four technologies4 An in-depth look at four key technologies and their value chains shows how Europe can use different strategic postures to strengthen its competitive positions. This research includes an in-depth exploration of advanced connectivity, quantum, AI and semiconductor markets, offering one example technology area for each strategic posture previously highlighted in the maturity-innovation matrix. Each summary provides an overview of the market, including the strategic posture and the current starting point, as well as potential supporting initiatives by the public sector, based on recommendations in the reports by Draghi, Letta and McKinsey Global Institute, as well as World Economic Forum dialogues.51 These are organized according to the six priority areas for spurring innovation and investment previously highlighted in the paper. Finally, it shares value chain priorities based on the research.52 Europe’s starting point: Scaled technology, various well-established leadership positions Strategic posture: Cement global leaders Advances in connectivity like 5G (and eventually 6G) and low-power wireless networks don’t just make connections faster. They lay the groundwork for critical capabilities, such as smart factories, autonomous driving and precision farming, which will advance Europe’s way of life. With the global market expected to reach $3.8 trillion by 2040,53 this sector has immense opportunity. Europe’s starting point and potential unlocking actions Europe has a strong ability to compete globally within certain parts of the technology innovation value chain such as 3GPP (the Third-Generation Partnership Project for standards organizations for mobile telecommunications), but its fragmented operator landscape, profit pools sitting outside of Europe, and regulated marketplace mean that significant shifts may be required for Europe to speed up technology adoption. –Building scale. Europe has not grown infrastructure as quickly as other regions, and faces high spectrum costs and fragmented spectrum processes, directly impacting telecom operators’ ability to increase network coverage and creating complexity for business- to-business (B2B) companies to invest in wireless technology solutions. Exploring reforms to the EU’s regulation and competition stance to support M&A could contribute to a unified, scalable market landscape. Moves could include making mergers conditional on deployment commitments rather than imposing punitive remedies, shifting telecom market definitions to the EU as opposed to individual country level, and favouring post-merger competition enforcement with strong legal means, instead of strict country-level regulation that effectively limits consolidation. –Simplifying the regulatory and permitting environment. The current regulatory environment and competition stance limit consolidation among telecom operators and completion of the Digital Single Market, as evidenced by the fact that the EU has 34 mobile network operators (MNOs) versus three in the US and four in China.54 Fragmentation created by lack of harmonization restricts cross-border solutions. Introducing cross-border regulatory entities for the advanced connectivity services sector – through for example simplified EU digital approvals – could increase demand for 4.1 Advanced connectivity Europe in the Intelligent Age: From Ideas to Action 20

Europe in the Intelligent Age 2025