Creating a Market for Scale & Innovation: Incentives to Power Europe's Tech Leadership

For Europe, winning on this front line means winning the tech race. We are rich in ideas and lead globally in areas like connectivity and green tech. Yet, our most promising companies are leaving – not for lack of ambition, but because they lack scalable markets, procurement opportunities and investments in Europe.

The core problem is not innovation but commercialisation. European companies face high regulatory burdens, scarce capital and fragmented national markets. They do not need more one-off pilot programmes and disconnected grants. Companies need customers and demand. Innovation cycles are now measured in weeks or month and scale and speed are key to success.

Digital technologies are the core enabler of competitiveness across all of Europe’s strategic sectors. They are central for our security, building a green economy and driving productivity.

The European Commission has set the right direction: reduce regulatory burdens, unlock investments and modernise procurement. But we are running out of time. The race is on. The EU must urgently create incentives, investment frameworks and market scale for innovative technologies. This ambition is already taking shape through initiatives such as the Copenhagen Project, which drives large scale investment and procurement in dual use technologies to protect Europe’s critical infrastructure, builds the future digital defence capabilities and restores Europe’s digital competitiveness and sovereignty. By linking innovation, procurement and investment, the project demonstrates how coordinated EU action can translate strategic planning into operational capability.

The power of innovation lies in its adoption. Without real, scalable demand and customers, our most promising tech companies will keep leaving Europe – or will be bought before they grow. Yet, Europe’s investment gap is enormous: almost €1.2 trillion per year.

The fiscal pressure means we must choose wisely. To protect Europe’s prosperity, security and our democratic model, the EU must invest where impact is highest: digital resilience and security, connectivity, automation, energy tech, mobility, green tech and health.

We simply cannot afford 27 separate solutions to strategic challenges like modernising our energy grids, protecting our critical infrastructure and deploying Artificial Intelligence. We need coordinated procurement, EU-level investment, integrated capital markets and harmonised tax incentives. The United States created demand through federal funding for defence, manufacturing and research. Europe must do the same – using its purchasing power to back the technologies it wants to lead in.

We must act now to unlock investments into Europe’s future. To scale what we invent, buy what we build and reap the benefits for Europe. This requires urgent EU action, political will by Member States and the commitment of Europe’s digitally transforming industries – which stand ready to invest in projects that will drive Europe’s security and competitiveness.

Expanding on DIGITALEUROPE’s AI and Tech Declaration launched on 10 September 2025 in Strasbourg, this paper outlines how we can do that – quickly, effectively and together.