[EN] Boosting New Technology and Innovation in Europe: Lessons across sectors including Defense

In his report, Much more than a Market, Enrico Letta emphasizes that the EU’s lag in R&D investment is “critical obstacle to economic competitiveness” and argues that major pan-European projects in AI and quantum computing have the potential to deliver breakthroughs that can drive sustainable growth. Mario Draghi, meanwhile, made a clear and urgent call: “Europe urgently needs to accelerate its rate of innovation both to maintain its manufacturing leadership and to develop new breakthrough technologies”.

He reaffirms the strong and direct link between research, innovation, productivity, and ultimately, growth and purchasing power. However, this paradigm is now being reshaped in Europe by a number of new forces.

Geopolitical shifts are reintroducing inter-state competition with some referring to the rise of a sovereignty-based capitalism. Simultaneously, major
technological revolutions – are intensifying global competition. Furthermore, the nature of innovation itself is evolving, increasingly shaped by ecosystems and non-linear pathways. At the same time, Europe faces an urgent imperative to invest massively in its defence in order to acquire the military, industrial and
technological capabilities needed for its strategic autonomy.

To round off the suite of strategic measures, Enrico Letta calls for unlocking a “fifth freedom” in the Single Market – the free circulation of knowledge, researchers, and data – paired with scaled pan-European research & innovation finance mechanisms to crowd in private capital and narrow the EU’s innovation gap.

This paper was published as part of the 33rd Evian Franco-German meeting (September 4 – 6, 2025)