The Digital Transformation We Need

The European Union (EU) is at a pivotal moment in its digital policy, confronted with growing reliance on foreign technology providers amid a changing geopolitical landscape. Despite significant investment in digital transformation through initiatives such as Horizon Europe, the Digital Europe Programme, and the Connecting Europe Facility, the EU’s approach has largely favored industry-focused, technology-driven funding. This approach has led to an overemphasis on ‘disruptive technologies’ and speculative high-tech solutions, often at the expense of addressing practical public needs and strengthening basic digital infrastructure.

With significant investment in digital transformation through initiatives such as Horizon Europe, the Digital Europe Programme and the Connecting Europe Facility, the EU’s approach has largely favoured industry-focused, technology-driven funding.

Three lessons

Lesson 1: There is a fixation on the promise of “disruptive technologies”

There is a widespread perception that funding for disruptive technologies such as artificial intelligence and quantum computing will ensure Europe’s global competitiveness. However, the broad nature of these fields and the allure of disruptive innovation can obscure the need for more nuanced, problem-oriented approaches. By pursuing highly speculative technological solutions, the EU risks allocating resources to complex, high-tech projects that may not directly serve its strategic goals or address pressing societal needs.

Lesson two: The approach to innovation is focused on industry demands, with too little direct connection to real, on-the-ground needs and everyday experiences.

EU digital funding is heavily directed toward industry-led projects, leaving limited room for solutions that address immediate public needs. This emphasis often results in technology that serves industry interests rather than creating accessible, useful tools for citizens or public services. Shifting more funds toward public digital infrastructure and locally-driven digital projects could lessen Europe’s reliance on global tech giants and foster technology that genuinely serves communities.

Lesson three: EU funding falls for hype and false narratives around new technologies

Many EU-funded projects reflect a tendency to embrace overly optimistic narratives about new technologies, particularly AI and virtual reality. For instance, some projects depict AI systems as if they could interact with humans as true “partners”—a portrayal that risks misguiding both policymakers and the public. By taking a more discerning, realistic view of emerging technologies, EU funding could avoid “techno-solutionism” and instead prioritize initiatives that meet genuine needs and produce tangible value.

Recommendations

Based on these findings, this policy brief proposes three recommendations to improve the EU’s digital funding framework:

Recommendation 1: Prioritise public digital infrastructure

Instead of emphasizing disruptive technologies, the EU should channel resources into strengthening public digital infrastructure, supporting these investments from the research phase to deployment. This approach would reduce Europe’s reliance on major tech corporations and promote greater digital sovereignty.

Recommendation 2: Balance industry support with public value objectives

EU funding should ensure a balance between industry growth and public value by investing in projects that directly address defined public needs. Funding should support practical, community-driven digital solutions that can improve digital literacy and accessibility across Europe.

Recommendation 3: Adopt a more critical approach to tech in funding

The EU needs to base its digital policy on a realistic assessment of technological impact, taking into account wider societal implications and avoiding the uncritical adoption of overblown narratives. This approach will help direct resources to practical, needs-based solutions and avoid speculative investments with limited public benefit.

This refocused approach to EU digital funding would better meet Europe’s needs, enhance digital resilience, and strengthen the sovereignty of Europe and Europeans.

Read the brief Landscape Mapping