Sfetcu, Nicolae (2024), ICT in the EU: Driving Digital Transformation and Innovation, IT & C, 4:1, DOI: 10.58679/IT96537, https://www.internetmobile.ro/ict-in-the-eu-driving-digital-transformation-and-innovation/

Abstract

Information and Communications Technology (ICT) plays a pivotal role in the European Union’s (EU) economic development, societal well-being, and global competitiveness. From fostering cutting-edge research to facilitating cross-border e-commerce, the EU’s ICT strategy underpins numerous policy initiatives and partnerships that drive digital transformation across the continent.

The European Union has acted to position itself as a leader in both technological innovation and regulation. The EU is unique in its approach to combining economic growth with human-centered values, promoting trust, privacy and sustainability as central themes of its technological development.

This article provides an overview of how the EU shapes and leverages ICT for economic growth, societal benefit, and global leadership.

Keywords: technology, Information and Communications Technology, ICT, European Union, innovation, development, economic growth

TIC în UE: Stimularea transformării și inovației digitale

Rezumat

Tehnologia informației și comunicațiilor (TIC) joacă un rol esențial în dezvoltarea economică a Uniunii Europene (UE), bunăstarea societății și competitivitatea globală. De la încurajarea cercetării de ultimă oră până la facilitarea comerțului electronic transfrontalier, strategia UE în domeniul TIC stă la baza numeroaselor inițiative politice și parteneriate care conduc transformarea digitală pe întreg continentul.

Uniunea Europeană a acționat pentru a se poziționa ca lider atât în materie de inovare tehnologică, cât și de reglementare. UE este unică prin abordarea sa de a combina creșterea economică cu valorile centrate pe om, promovând încrederea, confidențialitatea și sustenabilitatea ca teme centrale ale dezvoltării sale tehnologice.

Acest articol oferă o privire de ansamblu asupra modului în care UE modelează și folosește TIC pentru creștere economică, beneficii societale și leadership global.

Cuvinte cheie: tehnologie, Tehnologia informației și comunicațiilor, TIC, Uniunea Europeană, inovare, dezvoltare, creștere economică

IT & C, Volumul 3, Numărul 4, Decembrie 2024, pp. xxx
ISSN 2821 – 8469, ISSN – L 2821 – 8469, DOI: 10.58679/IT96537
URL: https://www.internetmobile.ro/ict-in-the-eu-driving-digital-transformation-and-innovation/
© 2025 Nicolae Sfetcu. Responsabilitatea conținutului, interpretărilor și opiniilor exprimate revine exclusiv autorilor.

ICT in the EU: Driving Digital Transformation and Innovation

Ing. fiz. Nicolae SFETCU[1], MPhil
nicolae@sfetcu.com

[1] Cercetător – Academia Română – Comitetul Român de Istoria și Filosofia Științei și Tehnicii (CRIFST), Divizia de Istoria Științei (DIS), ORCID: 0000-0002-0162-9973

Introduction

The European Union (EU) has acted to position itself as a leader in both technological innovation and regulation. The EU is unique in its approach to combining economic growth with human-centered values, promoting trust, privacy and sustainability as central themes of its technological development (European Commission 2024k). One of the main frameworks driving EU technology policy is the „Digital Decade” initiative, which aims to achieve a digital Europe by 2030 (European Commission 2021a).

The EU’s technological resources include a combination of public-private partnerships, regulatory frameworks and substantial investment initiatives. The Horizon Europe program, with a budget of €95.5 billion, is one of the largest research and innovation funding programs in the world, providing support for cutting-edge technological advances (European Commission 2024k). The EU also encourages cross-border cooperation through its Digital Innovation Hubs, which aim to facilitate knowledge sharing and help SMEs gain access to advanced technologies such as artificial intelligence, robotics and high-performance computing (European Commission 2024f).

In addition, the EU is committed to developing its semiconductor manufacturing capabilities, striving for resilience in an era of supply chain disruptions. The European Chips Act, announced in 2022, aims to double the EU’s share of the global semiconductor market to 20% by 2030, underscoring Europe’s focus on reducing dependence on foreign chipmakers (European Commission 2024e).

The EU also faces several technological challenges, including fragmentation between member states, which can hinder scalability and slow digital adoption (Bauer and Erixon 2020). Unlike the United States or China, the EU must reconcile various economic priorities, regulatory environments and political considerations. To address these issues, EU cohesion policies aim to harmonize technological adoption and promote digital literacy, ensuring that all member states benefit equally from technological progress (OECD 2022).

1. The Importance of ICT for the EU

The European Union (EU) has emerged as a major player in the global technology landscape, driven by ambitious policies, strong investments and innovative collaborations between member states. The EU’s technological focus is shaped both by the need to compete in the global economy and by the desire to uphold its values of inclusion, digital sovereignty and data privacy. As part of its mission to promote technological development, the EU has established a wide range of initiatives to boost digital transformation and encourage innovation. One of the most notable frameworks governing this transition is the European Digital Strategy, designed to ensure that technology works for people, the economy and society at large. (European Commission 2024a)

Figure 1. Export of high-tech products from 2007 to 2019 as part of total merchandise exports of the United States, Japan, and the European Union. Source: (Massadikov and Özhan 2022)

In recent years, the EU has emphasized the importance of digital sovereignty – seeking autonomy in crucial digital technologies such as semiconductors, artificial intelligence (AI) and cloud computing. The General Data Protection Regulation (GDPR), (European Commission 2024c) which set a global benchmark for privacy, and the European Green Deal, (European Commission 2021b) which promotes sustainable technology, are key examples of the EU’s approach to shape the digital future while staying true to its values. This multi-dimensional technology landscape, driven by policy alignment across sectors, is meant to ensure that Europe becomes a leader in creating a fair and human-centered digital environment.

1.1 Economic Growth and Competitiveness

ICT is a core enabler for innovation, productivity, and efficiency throughout the European economy. By investing in ICT infrastructure, the EU aims to:

Stimulate job creation: The digital sector is a key contributor to employment opportunities, with demand for ICT professionals outpacing other fields.
Boost innovation: Cutting-edge technologies—including artificial intelligence (AI), cloud computing, and advanced microelectronics—power new products and services, making European businesses more competitive globally.
Enhance productivity: Digital solutions—such as smart manufacturing, logistics, and data analytics—drive increased efficiency, helping companies streamline their operations and adapt to rapidly changing markets.

1.2 Social and Cultural Impact

ICT also has profound implications for everyday life in the EU:

Digital inclusion: Ensuring all Europeans have access to broadband connectivity, digital skills training, and e-government services is key to reducing the digital divide.
Education and skill development: As technology progresses, lifelong learning, reskilling, and upskilling programs become essential to maintain a digitally savvy workforce.
Cultural exchange: Digital platforms foster cultural and social interaction across borders, encouraging the sharing of knowledge, arts, and creative media.

2. Key EU Policy Frameworks and Initiatives

The European Union has long championed technological progress as a cornerstone of its economic growth, societal development and strategic autonomy. Over the past decades, the EU has established numerous policies and frameworks designed to encourage innovation, support technological investment and ensure that all Member States benefit from digital advances. This chapter focuses on key EU policies that promote technological growth, such as the Digital Agenda for Europe (Parlamentul European 2024a) and Horizon Europe (European Commission 2024j), while exploring the role of funding opportunities and cross-border cooperation initiatives such as the ‘Digital Compass Europe 2030’ (European Commission 2021a).

The EU has put in place a comprehensive range of policies and frameworks designed to encourage technological development. At the heart of these initiatives is the Digital Strategy for Europe, which aims to make Europe a leader in the digital age (European Commission 2024a). This strategy is designed to ensure that the EU not only competes globally, but also establishes a unified digital market that benefits all Member States. The strategy includes a focus on digital sovereignty, innovation financing, data protection and cybersecurity, ensuring that technology evolves in a way that supports European values.

The Strategic Technology Platform for Europe (STEP) supports European industry and boosts investment in technologies in Europe (European Union 2024b), under 11 EU programs for three leading investment areas:

Digital technologies and deep-tech innovation
Clean and resource-efficient technologies
Biotechnologies

Key programs such as Horizon Europe and the Digital Europe Programme provide substantial funding for research, development and technological uptake (European Commission 2024j). Horizon Europe, with a budget of over €95 billion, boosts innovation across multiple sectors, supporting projects related to artificial intelligence, quantum computing and green technologies (European Commission 2024l). Meanwhile, the Digital Europe Programme aims to build the EU’s digital infrastructure and increase digital skills among its workforce. Both frameworks underline the EU’s intention to create a cohesive technology ecosystem that will bridge the digital divide in its Member States.

In addition, the General Data Protection Regulation (GDPR) sets a global standard for data privacy, ensuring that technological progress is balanced with individual rights (EUR-Lex 2016). The GDPR serves as a critical part of the EU’s effort to create a secure digital environment while promoting cross-border data flows that comply with privacy standards.

The European Commission has detailed five major areas of action to strengthen competitiveness (Comisia Europeană 2024):

Unlocking more capital for European businesses
Ensuring energy independence and cheaper energy
Addressing the skills gap
Boosting digital innovation
Realizing the full potential of trade

2.1 SWOT study

A SWOT study (Smit et al. 2016) commissioned by the European Union identified the following strengths, weaknesses, opportunities and threats for the European Union?

Strengths:

Increased productivity, efficiency (resources), competitiveness (global), income
Growth of highly skilled and well-paid jobs
Improved customer satisfaction – new markets: increased personalization and product variety
Flexibility and control of production

Weaknesses:

High dependence on technology and network resilience: small disruptions can have major effects
Dependence on several successful factors including standards, coherent framework, supply of labor with appropriate skills, investment and R&D
Development and implementation costs
Potential loss of control over the enterprise
Semi-skilled unemployment
Need to import skilled labor and integrate immigrant communities

Opportunities:

Strengthening Europe’s position as a global leader in manufacturing (and other industries)
Develop new lead markets for products and services
Counteract negative demographics in the EU
Lower entry barriers for some SMEs to participate in new markets, links to new supply chains

Threats:

Cybersecurity, intellectual property, data privacy
Workers, SMEs, industries and national economies lacking awareness and/or means to adapt to Industry 4.0 and therefore falling behind
Vulnerability and volatility of global value chains
Adoption of Industry 4.0 by foreign competitors neutralizing EU initiatives

2.2 Key EU policies promoting technological progress

Digital Agenda for Europe

The Digital Agenda for Europe (DAE) (Parlamentul European 2024a) is part of the EU’s broader Europe 2020 strategy, which aims to deliver economic growth and job opportunities by harnessing the potential of digital technologies. (European Commission 2024h) The DAE aims to ensure that EU citizens have access to fast and secure internet, digital skills and an open digital market. This policy is essential in reducing digital fragmentation by establishing regulations that promote harmonization between Member States, while supporting research and innovation in Information and Communication Technologies (ICT). The overall objective of the Digital Agenda is to create a single and competitive digital market across the EU.

Horizon Europe

Horizon Europe, (European Commission 2024j) the successor to Horizon 2020, is the EU’s main funding program for research and innovation, with a budget of over €95 billion for the period 2021-2027. The program aims to address global challenges through technological research and support progress in key areas such as artificial intelligence, health technologies, green energy and more. It provides substantial funding to collaborative projects involving different stakeholders, including universities, SMEs and industry, with the aim of strengthening European competitiveness and competition in cutting-edge technologies. Horizon Europe’s three-pillar approach – Excellent Science, Global Challenges and Innovation Europe – creates pathways for technological progress and market deployment.

Digital Compass Europe 2030

In 2021, the EU adopted the ‘Digital Compass Europe 2030’ strategy (European Commission 2021a) to ensure that Europe becomes a world leader in innovation and digital sovereignty by 2030. The Digital Compass defines four cardinal points for digital development: digital skills, secure and sustainable digital infrastructure, digital transformation of businesses and digital public services. The strategy promotes investments in 5G/6G networks, AI, quantum computing and cybersecurity, among other technological advances. Importantly, it underlines the importance of cross-border initiatives, which aim to jointly develop technological resources between Member States to mitigate digital disparities and strengthen Europe’s technological independence.

2.3 EU funding opportunities and technology investments

The EU has established numerous funding mechanisms to stimulate technological innovation and support digital transformation. Some key funding opportunities are highlighted below:

Connecting Europe Facility (CEF)

The Connecting Europe Facility (European Commission 2024b) is an EU funding instrument focused on supporting high-performance infrastructure projects in the energy, transport and digital services sectors. Under Digital CEF, the aim is to provide adequate funding to improve connectivity and support initiatives such as cross-border 5G corridors and secure internet exchange points.

European Regional Development Fund (ERDF)

The European Regional Development Fund (Parlamentul European 2024b) is another important source of investment aimed at reducing regional disparities. The ERDF provides funding for innovation and technological development in the less developed regions of the EU, thus encouraging a balanced technological landscape that benefits all Member States.

InvestEU

The InvestEU program (European Union 2024a) acts as a catalyst for private and public investment in various sectors, including technology and digital transformation. By providing guarantees to investors, the program encourages large-scale investment in high-risk but high-impact technology projects.

2.4 Cross-border cooperation and initiatives

European High Performance Computing Joint Undertaking (EuroHPC)

The EuroHPC Joint Undertaking (European Commission 2024d) is a flagship example of cross-border cooperation, aiming to implement a world-class European supercomputing infrastructure. It enables Member States to pool resources and expertise to develop supercomputers capable of performing at the highest global level. These resources support research, innovation and technological applications in areas such as health, climate change and artificial intelligence.

The EU is currently investing EUR 150 billion in cybersecurity, supercomputing and digital training to digitize Europe (Comisia Europeană 2024).

Digital Innovation Hubs (DIH)

Digital Innovation Hubs are EU-backed initiatives (European Commission 2024g), designed to foster collaboration between regions by providing technical expertise, training and opportunities for collaboration. DIHs serve as hubs where businesses – especially SMEs – can experiment with new digital technologies, receive mentoring and access funding opportunities. This collaborative framework aims to improve regional development, bridge the digital divide and facilitate cross-border technology transfer.

GAIA-X and European Cloud Initiatives

GAIA-X (European Commission 2024i) is a cross-border collaborative initiative to establish a European cloud and data infrastructure, reducing reliance on non-EU technology providers while promoting secure and transparent data exchange. The aim is to develop a digital ecosystem that respects European values, encourages innovation and ensures digital sovereignty. GAIA-X promotes cooperation between public authorities, companies and researchers to create standards for data sharing and cloud interoperability across the continent.

2.5 The role of the Digital Single Market and EU-wide initiatives for technology integration

A crucial element of the EU’s technology strategy is the Digital Single Market (DSM), an initiative to create an integrated market for digital services, content and commerce across the Union (European Commission 2019a). Launched in 2015, the DSM aims to remove national barriers to cross-border digital activities, ensuring that businesses and citizens can seamlessly engage in economic and social activities across the EU. By harmonizing regulations and encouraging investment in technology, DSM aims to boost innovation, create jobs and improve access to technology. Key goals include:

Cross-border e-commerce: Simplifying rules for online shopping and delivery, ensuring that European consumers and retailers benefit from the same protections and opportunities across all member states.
Data economy: Promoting free flow of data and trusted data-sharing frameworks, paving the way for innovative data-driven services and market growth.
Regulatory harmonization: Streamlining regulations on privacy, consumer rights, and digital transactions to foster a predictable and secure digital landscape.

In addition to the DSM, several initiatives have been launched to support digital infrastructure, research and technology integration across the EU. The Connecting Europe Facility (CEF) (European Commission 2024b) provides funding for digital connectivity projects with a focus on building high-speed networks and ensuring accessibility even in remote areas. Another vital project is Horizon Europe, (European Commission 2019b) the EU’s research and innovation program, which allocates significant funds to technological research, including AI, robotics and quantum computing (European Commission 2024j).

Another prominent initiative at EU level is the European Digital Innovation Hubs (EDIHs) (European Commission 2024f). These centers aim to provide technological know-how and encourage collaboration between startups, SMEs and other stakeholders to integrate technologies such as artificial intelligence, advanced manufacturing and big data analytics into the core of European business. The EU has also introduced the Digital Compass, (European Commission 2021a) outlining specific goals for 2030, including improving connectivity, increasing digital skills and advancing technology in public services. All these initiatives underline the EU’s proactive approach to ensuring that technological integration benefits all its citizens.

2.6 Europe’s Digital Decade and 2030 Targets

To build on the DSM Strategy, the European Commission introduced the “Digital Decade” vision outlining targets for 2030 in four key areas:

Digital Skills: Ensuring that at least 80% of adults have basic digital skills and supporting the digital education of youth.
Secure and Sustainable Digital Infrastructures: Expanding gigabit connectivity, 5G coverage, and next-generation computing, alongside energy-efficient data centers.
Digital Transformation of Businesses: Encouraging cloud adoption, AI integration, and data usage in small and medium-sized enterprises (SMEs).
Digitalization of Public Services: Improving digital government services and e-health solutions for citizens.

2.7 The European Data Strategy

Data is at the heart of Europe’s digital economy. Through the European Data Strategy, the EU aims to:

Foster data sharing: Support common European data spaces in strategic sectors—such as manufacturing, healthcare, and energy—to accelerate innovation.
Ensure strong data governance: Enhance citizen trust and uphold fundamental rights by applying rigorous data protection standards like the General Data Protection Regulation (GDPR).
Leverage analytics and AI: Create a secure and ethical environment that allows AI-driven applications to flourish under strict governance frameworks.

2.8 The Digital Services Act (DSA) and Digital Markets Act (DMA)

Adopted in 2022, these groundbreaking legislative initiatives update regulations on online platforms:

DSA: Aims to clarify the responsibilities of digital platforms by creating a safer online environment. It addresses content moderation, user protections, and accountability for illegal or harmful content.
DMA: Targets gatekeeper platforms—dominant players controlling core platform services—ensuring they do not abuse their market power. It introduces rules on interoperability and non-discriminatory business practices.

2.9 The European Chips Act

To reduce dependency on foreign semiconductor suppliers and support Europe’s technological sovereignty, the European Chips Act seeks to:

Increase production: Boost the share of global chip manufacturing within Europe by promoting research, development, and capacity building.
Strengthen supply chains: Enhance resilience by encouraging public-private partnerships and investing in state-of-the-art fabrication plants.
Accelerate innovation: Create hubs of excellence and training programs to address the industry’s skills gap.

3. Strategic Technologies and Focus Areas

3.1 5G and Connectivity

Europe’s push for widespread 5G deployment underpins transformative use cases in areas such as telemedicine, smart cities, and autonomous vehicles. EU programs and funding mechanisms (e.g., the Connecting Europe Facility) support member states in building robust ICT infrastructure to ensure that gigabit networks and 5G coverage reach all citizens.

3.2 Artificial Intelligence (AI)

The EU seeks to become a world leader in trustworthy AI by:

Funding research and innovation: Through programs like Horizon Europe, the EU nurtures AI research and collaborations among universities, startups, and established firms.
Ethical and legal frameworks: The EU’s proposed AI Act sets out risk-based regulations, ensuring AI solutions adhere to Europe’s human-centric principles and fundamental rights.
Promoting adoption: By providing guidelines for ethical AI deployment, the EU encourages public and private sectors alike to integrate AI responsibly in diverse fields—from healthcare to manufacturing.

3.3 Cybersecurity

In a hyperconnected world, safeguarding networks and data is paramount. The EU’s approach includes:

Regulation and standards: The Network and Information Security (NIS2) Directive outlines obligations for essential service providers to bolster cybersecurity measures.
Cooperation and information sharing: EU agencies such as the European Union Agency for Cybersecurity (ENISA) facilitate coordination among member states in detecting, preventing, and responding to cyberthreats.
Investment in resilience: Through funding programs and initiatives, the EU supports the development of advanced cybersecurity solutions and workforce training.

3.4 Quantum and High-Performance Computing

To stay at the forefront of the next computing revolution, the EU invests heavily in:

Quantum technologies: Projects under the Quantum Flagship initiative focus on quantum communication, simulation, and sensors, aiming to lay the groundwork for a new era of computing power.
Supercomputing infrastructure: The European High-Performance Computing Joint Undertaking (EuroHPC JU) builds top-tier supercomputers and fosters collaboration between academia and industry in HPC research.

4. Challenges and Future Prospects

4.1 The EU’s current position in the global technological hierarchy

The European Union is one of the three great technological powers, along with the United States and China. The EU has demonstrated considerable strength in areas such as industrial technology, clean energy innovations and privacy-focused regulation. However, its position in the global technology race faces unique challenges. Unlike the United States, which benefits from tech giants such as Google, Amazon and Microsoft, or China, with the rise of companies such as Huawei and Alibaba, the EU does not have such large-scale concentrated technology firms. Instead, the EU boasts an ecosystem of innovative startups and SMEs supported by a collaborative framework between member states.

Figure 2. Patent application numbers of the European Union, the United States and Japan, 1990-2018. Source: (Massadikov and Özhan 2022)

Key differences in technological capabilities can be observed between EU Member States. Northern and Western European countries such as Germany, Sweden and the Netherlands are leaders in technological progress with robust digital infrastructure and investments in AI and Industry 4.0. On the other hand, southern and eastern Member States such as Greece, Bulgaria and Romania continue to face challenges in expanding digital infrastructure, technology integration and general digital literacy, highlighting a digital divide that the EU continues to address through targeted funding and support.

The EU’s approach to technology is differentiated by its focus on regulation and ethical development. For example, the GDPR (European Commission 2024c) set a precedent for data privacy that inspired similar regulations around the world. This focus on protecting citizens’ data rights can be seen as both a strength and a potential limitation. On the one hand, the EU ensures robust consumer protection; but tight regulations can slow innovation and technology development compared to the faster progress seen in the US and China.

(DigitalEurope 2024) assesses the EU’s exposure to potential disruptions to the wider supply chain in each technology area.

Figure 3. Assessment of EU competitiveness and supply chain risk by technology domain. Source: (DigitalEurope 2024)

Despite these challenges, the EU is striving to strengthen its technological sovereignty, with a particular focus on AI, semiconductors and the green transition. In particular, initiatives such as the European Chips Act, (European Commission 2024e) are designed to boost semiconductor production in Europe to reduce dependence on external suppliers. The EU’s vision is to establish itself as a leader in sustainable technologies, reflecting its commitment to both technological growth and environmental protection.

”Every year, €300 billion of European savings are diverted abroad due to the fragmentation of our capital markets system. If we complete the CMU, companies in the EU could raise an additional €470 billion a year in funding. This capital could be used to fuel innovation, growth and job creation across the continent.” (Comisia Europeană 2024)

Challenges and opportunities:

Bridging the Digital Divide: Rural and remote areas still face connectivity challenges. The EU must prioritize last-mile broadband rollout and affordable access to ensure inclusivity.
Data Sovereignty and Privacy: Striking the right balance between fostering data-driven innovation and protecting citizens’ rights remains an ongoing task.
Talent and Skill Gaps: Although demand for ICT professionals is high, there is a persistent shortage of digital skills. Increased funding for education, upskilling, and reskilling programs is crucial.
Geopolitical Competition: As global competition intensifies in emerging technologies (AI, quantum computing), the EU must continue to invest in R&D, protect intellectual property, and collaborate strategically.

Conclusion

The European Union (EU) has long recognized the essential role of technological resources in driving economic growth, social well-being and sustainable development. This chapter explores the EU’s position on technological development, focusing on its policies, the different levels of technological progress across Member States and the emerging challenges and opportunities that come with pursuing innovation.

The European Union’s comprehensive approach to technological progress through frameworks such as the Digital Agenda for Europe, Horizon Europe and the Europe 2030 Digital Compass has established a solid foundation for growth and innovation. These policies and initiatives not only boost the EU’s technological capabilities, but also focus on inclusion, ensuring that all Member States benefit from collective progress. By providing funding mechanisms such as Horizon Europe and the Connecting Europe Facility, the EU encourages innovation, reduces regional disparities and nurtures an ecosystem where technological progress can flourish across borders. As the world becomes increasingly digital, cross-border EU initiatives such as EuroHPC (European Commission 2024d) and GAIA-X (European Commission 2024i) exemplify the importance of collaboration for shared digital prosperity and a cohesive technological future for Europe.

The European Union’s vision for ICT extends beyond mere infrastructure and technology—it aims to cultivate an inclusive, sustainable, and innovative digital society. Through strategies like the Digital Single Market, the European Data Strategy, and legislative frameworks such as the Digital Services Act and Digital Markets Act, the EU aspires to reinforce its digital sovereignty, safeguard citizens’ rights, and foster an environment ripe for technological advancement.

Looking ahead, success hinges on robust partnerships among European institutions, member states, industry stakeholders, and citizens alike. By aligning policy, regulation, and investment, the EU can not only harness the full potential of ICT for economic growth and social cohesion but also assert its leadership in shaping the global digital future.

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