Europe in the Age of AI: How Technology Leadership Can Boost Competitiveness and Security
Published: 17 November 2025
By: Tony Blair Institute for Global Change
As the world enters a new era defined by rapid advances in frontier technologies such as artificial intelligence (AI), robotics, clean energy, and biotechnology, Europe finds itself at a critical crossroads. The emerging geopolitical order highlights the growing significance of technological leadership, which now underpins not just economic prosperity but national security and societal resilience.
Navigating a Shifting Global Landscape
The global balance of power has shifted away from the liberal and transatlantic order that once delineated Europe’s global position. Instead, a new era marked by regional superpowers, strategic technological advancements, and hard power competition—most notably spearheaded by the United States and China—is taking shape. Countries mastering these technologies will dominate global affairs for decades to come.
Europe’s ability to compete in this new world will determine whether it can uphold its way of life, ensure prosperity, and maintain sovereignty. However, the continent is currently losing ground. The United States, for example, boasts 17 times more compute capacity than Europe—a critical metric for training large AI models—and China is swiftly constructing national AI infrastructure at an unprecedented pace.
In contrast, Europe faces key challenges: fragmented markets and complex regulation hamper business scale-up; chronic underinvestment in infrastructure; some of the world’s highest energy costs; and capital markets that stifle innovation. These hurdles have created a widening technological gap. While the US has birthed over 240 technology companies valued above $10 billion, Europe has produced just 14. Paradoxically, European households hold €11.5 trillion in cash and deposits—capital that, if mobilized, could fuel innovation and growth.
The Stakes: Economy, Security, and Societal Trust
This situation is not simply an economic matter but an existential one. Technology underpins Europe’s ability to defend democratic institutions, sustain welfare systems, and project stability amid global uncertainties. The full-scale Russian invasion of Ukraine starkly illustrated the necessity of independent defence capabilities, where advances in drone warfare showcased the pivotal role of technological leadership.
Moreover, growing political disenchantment, low voter turnout, and the surge of anti-establishment movements threaten the foundational values Europe upholds. Technology has a critical role here as well—improving public services, enhancing government efficiency, and helping to rebuild citizen trust in democratic processes.
The Need for Bold and Urgent Reform
Despite the urgency, digitalisation remains a low priority for European voters, leading many policymakers to overlook or underplay the significance of the challenge. Decades of missed opportunities and partial reforms have allowed Europe’s share in global GDP to shrink, while promising startups look abroad for funding and growth.
To reverse this trajectory, European leaders must enact profound and swift change to transform Europe into a strong, competitive, and globally influential digital power. This transformation requires:
- Unlocking infrastructure investments to provide the technological backbone the continent needs
- Accelerating technology adoption across sectors to drive productivity gains
- Fostering an innovative private sector supported by ample capital
- Streamlining regulation to remove barriers to business scaling and innovation
- Investing in talent development to equip Europeans with skills for the future
- Elevating the digital agenda to a top political priority closely tied to citizens’ security and prosperity
The goal is not to replicate the economic or social models of the US or China but to cultivate a uniquely European technology ecosystem—one rooted in democratic values, the rule of law, and a commitment to building a more prosperous, global community.
Challenging Misconceptions and Political Inertia
A common misconception impeding progress is the conflation of digital sovereignty with autarky—the idea that Europe must build domestic alternatives for every technology. This approach is not feasible economically nor strategically. True sovereignty offers leverage and choice in the global technology ecosystem, leveraging Europe’s existing strengths like market size and advanced manufacturing.
What Europe faces instead is a lack of coherent and forceful political leadership. Although reports like the Draghi report have offered nearly 400 recommendations to enhance EU competitiveness, only a fraction have been implemented. Many challenges requiring continental collaboration remain addressed piecemeal by individual governments.
A Call to European Leaders
The report emphasizes that a genuine breakthrough requires the highest levels of political commitment from heads of government and the European Commission, focusing on three critical elements:
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A Compelling Narrative
European leadership must connect technological competitiveness to issues citizens care about: security, prosperity, and future opportunities for their children. Unlike other global leaders who have successfully framed the digital transition as a priority, Europe’s leaders have yet to do so convincingly. -
Clear Strategic Direction
Political leaders must prioritize ruthlessly across numerous digital initiatives, clearly distinguishing national priorities from those needing EU-wide action, to prevent diffusion of focus and effort. -
A Political Mandate for Action
Ministers in charge of education, finance, and energy frequently resist reforms for digital progress due to national prerogatives. Only strong political leadership from prime ministers and presidents can overcome such obstacles and signal that the stakes are existential.
Building a Strong, Secure, and Prosperous Europe
Technology leadership should be central to Europe’s strategy for security and economic prosperity. This involves viewing digital sovereignty as strategic leverage, matching global peers on AI investments (including skills, energy, and computing resources), and acting collectively—inclusive of the EU-27 plus countries such as Norway, the UK, Switzerland, and Ukraine—to tackle challenges no nation can solve alone.
Though political deadlock between domestic and European priorities has long hindered decisive action, the report urges that this impasse can be broken. Historical precedent exists for electoral platforms that are pro-growth, pro-welfare, pro-nation, and pro-Europe simultaneously—and Europe must realize this convergence again.
Conclusion
Success in the technological arena is vital for preserving Europe’s way of life, securing its borders, and delivering broad societal benefits. As the world faces rising instability, only a strong, democratic, and rules-based Europe can provide the stability and security the international community seeks.
Signatories:
Tony Blair, Former Prime Minister of the UK and Executive Chairman of the Tony Blair Institute for Global Change
Sanna Marin, Former Prime Minister of Finland and TBI Strategic Counsellor
Matteo Renzi, Former Prime Minister of Italy and TBI Strategic Counsellor
For Europe to thrive in the age of artificial intelligence and beyond, bold leadership and coordinated action are indispensable. The moment to act and seize technological leadership is now.
