Europe in the Intelligent Age 2025

16. Alexander Sukharevsky, Eric Hazan, Sven Smit, Marc-Antoine de la Chevasnerie, Marc de Jong, Solveigh Hieronimus, Jan Mischke, and Guillaume Dagorret,“Time to place our bets: Europe’s AI opportunity,” McKinsey, 1 October 2024, https://www.mckinsey.com/capabilities/quantumblack/our-insights/time-to-place-our-bets-europes-ai-opportunity. 17. Company quarterly financial reports, reporting period first to third quarter, 2024. 18. Analysis based on EU KLEMS – INTANProd database, released 2023, where investment in ICT equipment is given as a share of non-residential gross fixed capital formation; Lareina Yee, Michael Chui, and Roger Roberts, et al, McKinsey Technology Trends Outlook 2024, McKinsey, 16 July 2024, https://www.mckinsey.com/capabilities/mckinsey-digital/our- insights/the-top-trends-in-tech. 19. 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. 20. EUKLEMS database, 2023 release: https://euklems-intanprod-llee.luiss.it/. 21. 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; 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. 22. Eurostat, Healthcare Expenditure Statistics, updated November 2024, https://ec.europa.eu/eurostat/statistics-explained/ index.php?title=Healthcare_expenditure_statistics_-_overview . 23. “Defense expenditure as percentage of GDP NATO total and NATO Europe,” NATO, February 2024, https://www.nato.int/ nato_static_fl2014/assets/pdf/2024/2/pdf/FACTSHEET-NATO-defence-spending-en.pdf; “Secretary General welcomes unprecedented rise in NATO defence spending,” NATO, 15 February 2024, https://www.nato.int/cps/en/natohq/ news_222664.htm. 24. Ibid. 25. 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. 26. Based on Europe’s ranking relative to other leading regions in World Bank Doing Business Rankings, 2020, https:// archive.doingbusiness.org/en/doingbusiness. 27. 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. 28. Based on an assessment of global market size of each technology by 2040 and its strategic importance. This paper also analysed Europe’s position within each step of the technology value chain for areas of strategic importance. These dimensions were mapped onto a matrix, plotting the global tech life cycle maturity of each tech domain against Europe’s competitive position (based on cumulative, global, granted and current patents and publications (2000-2023), and cumulative capital investment relative to the US and China. 29. Additional insight into lighthouse initiatives may be found here: https://www.mckinsey.com/capabilities/operations/our- insights/the-continuing-evolution-of-the-global-lighthouse-network. 30. 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. 31. Central processing unit intellectual property. The design and technology that can be licensed includes pre-designed and pre-verified instruction execution functions and computational capabilities required for processing tasks in processor cores. 32. Part of High-Level Dialogue on Europe in the Age of Intelligent Economies hosted by World Economic Forum in October 2024. 33. 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. 34. 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. 35. Sven Smit, Magnus Tyreman, Jan Mischke, Philipp Ernst, Eric Hazan, Jurica Novak, Solveigh Hieronimus, and Guillaume Dagorret, “Securing Europe’s future beyond energy: Addressing its corporate and technology gap.” McKinsey, May 2022, https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/securing-europes-competitiveness- addressing-its-technology-gap. 36. Part of High-Level Dialogue on Europe in the Age of Intelligent Economies hosted by World Economic Forum in October 2024. 37. Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla. 38. Magnificent 7 R&D per CapitalIQ; Europe R&D per Eurostat; Massimo Giordano, Sven Smit, Jan Mischke, Guillaume Dagorret, Fredrik Dahlqvist, Sylvain Johansson, Marc-Antoine de la Chevasnerie, Solveigh Hieronimus, and Pieter Ottink, “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#/. Europe in the Intelligent Age: From Ideas to Action 33