Technological sovereignty with subsidies?

After a few decades of globalization and industrial delocalizations, Europe has seen that it must regain technological sovereignty to survive. The pandemic held up a mirror to us: we didn't even know how to make masks, let alone mechanical respirators. Our automotive industry is suffering because it depends more and more on components it has to import, such as batteries or computer systems. The war in Ukraine and the Trump presidency have made us realize that we not only have to be able to defend ourselves but also to produce the high-tech weapons needed today. The AI revolution has made it clear that the champions of the sector are in the USA and China, with some European exceptions like the French Mistral AI. The EU urgently needs to close the gap with the other two major blocs if it wants to remain a relevant global player. And this need is especially acute in a field in which we have lost ground and which is currently decisive: information and communication technologies (ICT), which include AI and the chip industry.Our technological lag is paradoxical, because since the 80s the EU, then the EEC, has subsidized research, development and cooperation between industry and academia. Indeed, first it was the ESPRIT program, focused on ICT, and then the successive framework programs, which cover all sectors. Likewise, member states, Spain, and also Catalonia, have had subsidy programs for decades with the same objectives. On the other hand, if we compare ICT sovereignty in the 80s with that of today, the result is devastating: we have gone from having many computer manufacturers (Bull in France, ICL in the United Kingdom, Siemens in Germany, Secoinsa in Spain, Telesincro in Catalonia, etc.) to having none. Regarding the mobile phone revolution, which began in Europe, it has shifted to Asia and the US. Chip manufacturing, which in the 80s motivated plans and subsidies for microelectronics throughout Europe and Spain in particular, has concentrated in Asia, with the honorable exception of the Dutch ASML, which supplies equipment to Asian chip manufacturers. Supercomputing subsidies have served to have some well-placed facilities in the international rankings of the sector, but their contribution to technological sovereignty and the ICT industry is quite limited. As for software, things have not gone better, and we have already discussed the AI landscape in Europe.

What's happening to us then? It is difficult to conduct a deep analysis in an article. We could blame over-regulation in the EU compared to China and especially the US: the Draghi report recommends radically simplifying the General Data Protection Regulation and pausing AI regulation. We can also criticize the fragmentation of the capital market in the EU, which makes it harder for companies to find money. But, given the results of public subsidies, we can also ask ourselves if they are the most appropriate instrument to drive technological innovation. In some cases, especially in large companies, subsidies have served to maintain R+D departments during periods of low demand from real clients. This is not necessarily bad, but it is transient. However, companies and technology centers have also emerged that have made subsidies a very important part of their income, to the detriment of developing truly competitive products. Or, what is the point of subsidizing chip companies, quantum computers, or AI with a few million euros, when the dominant players are companies that attract billions from private investors? In projects subsidized with universities and companies, what often results are publications from the former (which is not bad either), but few or no commercial products from the latter. Grants are good for non-profit fundamental research. But to promote innovation and technological sovereignty, perhaps it would be better to use the purchasing power of public administrations. In strategic sectors and by modifying, if necessary, public procurement laws, administrations could preferentially buy from European (or national) companies that had or committed to making certain products, even if they were not initially as good as American or Asian ones. This would strengthen these companies and increase their probability of becoming European or at least national champions. Perhaps in this way we would achieve having office software, computers, cloud, AI, etc. made in Europe. In the arms or aeronautics industry (as in the case of Airbus), Europe has known how to do it. The French government does it with Mistral. This is also how China has achieved its champions. In Catalonia, we have been slow in fields where we had leading companies with consolidated products, such as SCYTL in electronic voting. Sovereignty begins when you bet on the products of your people.