Europe in the Intelligent Age 2025

Endnotes 1. Massimo Giordano, Sven Smit, Jan Mischke, et al, “Investment: Taking the pulse of European competitiveness,” McKinsey, 20 June 2024, https://www.mckinsey.com/mgi/our-research/investment-taking-the-pulse-of-european- competitiveness; Sven Smit, Magnus Tyreman, Jan Mischke, et al, “Securing Europe’s Competitiveness: Addressing its technology gap,” McKinsey, 22 September 2022, https://www.mckinsey.com/capabilities/strategy-and-corporate- finance/our-insights/securing-europes-competitiveness-addressing-its-technology-gap. 2. Chris Bradley, Michael Chui, Kevin Russell, et al. “The next big arenas of competition,” McKinsey, 23 October 2024, https://www.mckinsey.com/mgi/our-research/the-next-big-arenas-of-competition. 3. Massimo Giordano, Sven Smit, Jan Mischke, et al, “Investment: Taking the pulse of European competitiveness,” McKinsey, 20 June 2024, https://www.mckinsey.com/mgi/our-research/investment-taking-the-pulse-of-european- competitiveness. Note: This is based on the ROIC of public companies with 2022 revenue of more than $1 billion; 2015- 22 weighted average net operating profit less adjusted taxes (NOPLAT)/invested capital. Excludes financial services and real estate companies. Inflation adjusted (2014 as base year) based on Europe 30 and US inflation. US data in dollars; Europe data in euros. Excludes companies without complete revenue, NOPLAT, capital expenditure or invested capital time series in 2014-22. 4. The 14 significant technology domains are AI, advanced connectivity, climate technologies, cloud and edge computing, digital trust and cybersecurity, electrification and renewables, future of bioengineering, future of mobility, future of robotics, future of space technologies, immersive reality technologies, next-generation software development, quantum technologies and semiconductors. 5. Sven Smit, Magnus Tyreman, Jan Mischke, et al, “Securing Europe’s Competitiveness: Addressing its technology gap,” McKinsey, 22 September 2022, https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/ securing-europes-competitiveness-addressing-its-technology-gap. 6. Press release: Budapest Declaration on the New European Competitiveness Deal, European Council of the European Union, 8 November 2024, https://www.consilium.europa.eu/en/press/press-releases/2024/11/08/the-budapest- declaration/. 7. Mario Draghi, “The Future of European Competitiveness: In-depth Analysis and Recommendations,” September 2024, https://commission.europa.eu/document/download/ec1409c1-d4b4-4882-8bdd-3519f86bbb92_en?filename=The%20 future%20of%20European%20competitiveness_%20In-depth%20analysis%20and%20recommendations_0.pdf. 8. Enrico Letta, “Much more than a market,” April 2024, https://www.consilium.europa.eu/media/ny3j24sm/much-more- than-a-market-report-by-enrico-letta.pdf. 9. Massimo Giordano, Solveigh Hieronimus, Sven Smit, et al, “Accelerating Europe: Competitiveness for a new era,” McKinsey, 16 January 2024, https://www.mckinsey.com/mgi/our-research/accelerating-europe-competitiveness-for- a-new-era; “Investment: Taking the pulse of European competitiveness,” McKinsey, 20 June 2024; Sven Smit, Magnus Tyreman, Jan Mischke, et al, “Securing Europe’s Competitiveness: Addressing its technology gap,” McKinsey, 22 September 2022, https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/securing-europes- competitiveness-addressing-its-technology-gap; “Time to place our bets: Boosting Europe’s competitiveness across the AI value chain.” https://www.mckinsey.com/capabilities/quantumblack/our-insights/time-to-place-our-bets-europes-ai- opportunity, October 2024. 10. Enrico Letta, “Much more than a market,” April 2024, https://www.consilium.europa.eu/media/ny3j24sm/much-more- than-a-market-report-by-enrico-letta.pdf. 11. Massimo Giordano, Sven Smit, Jan Mischke, et al, “Investment: Taking the pulse of European competitiveness,” McKinsey, 20 June 2024, https://www.mckinsey.com/mgi/our-research/investment-taking-the-pulse-of-european- competitiveness. 12. “Grands projets” (or “grands projets culturels”) was an informal name of French President Francois Mitterrand’s expansive architectural programme to construct eight new modern monuments in Paris during the last two decades of the 20th century, including the Musee d’Orsay, La Defense and the Louvre Pyramid. More recently, many European government and industry leaders have used the term to refer to ambitious public sector-led initiatives or efforts that can help the region increase its levels of technological innovation and competitiveness. 13. 28th regimes entail optional legal frameworks within the European Union which do not supersede national rules but provide an alternative for Member States to consider. They can be applicable in limited scope or with respect to specific sectors, alongside existing EU or national legal frameworks. 14. This is based on investment in private-market and public-market capital raises, private equity and public investments, along with a broader assessment of patenting, publications and expert judgement. Corporate investments are excluded from this view and make matters worse. They vary slightly across technologies but as an example, global corporate investment in AI was more than 1.5 times higher than private and public capital investments. 15. Chris Bradley, Michael Chui, Kevin Russell, et al. ”The next big arenas of competition,” McKinsey, 23 October 2024, https://www.mckinsey.com/mgi/our-research/the-next-big-arenas-of-competition. Europe in the Intelligent Age: From Ideas to Action 32