Authored by Antonio Manganelli, CERRE Research Fellow and University of Siena.
The debate about the Cloud and AI Development Act is getting louder and louder… and I can hear it even from my university in Siena. It reopens an old question with distinctly new stakes: what do we actually mean by “strategic autonomy,” and what, if anything, does “sovereignty” mean when applied to an industry or a service? Sovereignty has a strict political meaning in classical theory. But apply it to markets and market players, and something shifts: the boundary between global competition and geopolitics starts to dissolve.
Competition is generally healthy in markets—it drives efficiency, innovation, and consumer benefit. But commercial rivalry is spilling into geopolitics, and states and firms are trying to weaponise each other’s dependencies.
Given its trade-intensive economy, Europe is particularly vulnerable to this type of weaponisation. Recent European reflections – from Draghi’s and Letta’s reports to the Commission’s competitiveness compass – converge on a single diagnosis: innovation is the engine of competitiveness and the ability compete geopolitically, and Europe lags badly behind in innovation.
My upcoming paper examines precisely this: how digital transformation and innovation dynamics relate to EU competitiveness. I find that innovation-driven competitiveness requires a mutually reinforcing combination: frontier research and innovation, effective commercialisation of research, and broad adoption across sectors and firm sizes. Unfortunately, the EU is lagging, and any policy trying to address these deficiencies faces genuine trade-offs that cannot be wished away.
Innovation expands the size of the pie: it is what avoids international trade becoming a zero-sum game. Historically, technological progress has reshaped trade patterns, enabled globally integrated value chains, and made the world profoundly more interdependent than it was – and it can likely do so again.
Indeed, “strategic autonomy“, properly understood, does not mean isolation or self-sufficiency. Rather, it means preserving Europe’s capacity to decide when and how to cooperate, to act independently when necessary, but from a position of strength that allows genuine partnership. This is the concept of “open strategic autonomy” that can be read quite clearly between the lines of Letta and Draghi.
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