Executive Brief: Removing regulatory burden for a more competitive and resilient Europe

Europe’s tech future is a geopolitical imperative. Staying competitive in critical technologies like AI, quantum computing and advanced semiconductors is essential for our economic resilience, defence capability and global relevance. Whilst Europe holds strong supply chain positions in energy tech, advanced manufacturing, health, biotech and space, it lags global competitors in 7 out of 8 strategic technology areas.

The main barrier is not talent or market size. We have a vast market of 440 million consumers and 23 million companies, account for 15 per cent of global GDP, file 17 per cent of the world’s patent applications, and are home to 18 per cent of top-tier AI talent. The problem lies in our inability to scale and commercialise innovation. Fragmented markets, non-scalable national incentives and procurement schemes, and – above all – overly complex regulation are holding us back.

This paper addresses the regulatory dimension. It offers practical proposals to reduce unnecessary burdens in AI, data, and cybersecurity rules. There is a broad consensus amongst CEOs that regulatory simplification would be the single most powerful lever to boost investment and innovation in Europe.

Acknowledging this, the Commission has committed to reducing reporting obligations by at least 25 per cent for large companies and at least 35 per cent for SMEs by the end of its mandate in 2029. DIGITALEUROPE calls for bolder cuts of 50 per cent for Europe’s industry to stay competitive, in line with Draghi’s recommendations.

The upcoming digital simplification package presents a timely opportunity to implement targeted reforms. By focusing on three critical areas – data, artificial intelligence, and cybersecurity – we can enact low-hanging, high-impact changes that will:

• Simplify complex and overlapping regulations to reduce administrative burdens;
• Enhance legal clarity and coherence across Member States; and
• Strengthen Europe’s capacity to scale and compete globally.

This comprehensive proposal outlines our key recommendations in each of these areas, aiming to build a more agile, competitive, and technologically sovereign Europe.