BRUSSELS—The European Union is pledging more than $150 billion to develop next-generation digital industries this decade as it seeks to reverse a widening gap with the U.S. and East Asian rivals in advanced technologies like chips and artificial intelligence.
Funded as part of the EU’s $2 trillion Covid-19 economic recovery package, the new “Digital Compass” aims to significantly boost the bloc’s technological autonomy by 2030.
Europe’s need to improve what politicians have termed digital sovereignty was highlighted by trade disputes with the U.S. under former President Donald Trump and growing geopolitical tensions with China. Over the past year, supply-chain bottlenecks from coronavirus lockdowns and a shortage of microchips crucial to the automotive industry—a pillar of the region’s economy—have further increased Europe’s awareness of its industries’ reliance on other economies for daily essentials.
“We need to become less dependent on others when it comes to key technologies,” said European Commission Executive Vice-President Margrethe Vestager.
The U.S. is also addressing reliance on foreign technology, particularly from China. Last month President Biden issued an executive order launching a review of products and sectors where the country could face supply-chain disruptions from factors including “geopolitical and economic competition.” An initial review will focus on high-tech products including semiconductors, electric-vehicle batteries, certain pharmaceutical ingredients and critical elements and minerals.