Reducing Europe’s Technological Dependencies Through Strategic Indispensability

The return of Donald Trump to the White House—backed by a coalition of tech oligarchs—has made one thing clear: no free society or truly independent economy can rely on centralized digital infrastructures controlled by foreign corporations.

Amid intensifying geopolitical tensions and trade wars, the policy paper Beyond LEGO: the Need for EU-based Building Blocks of Technology, authored by Alexandre Gomes, Maaike Okano-Heijmans and Jelle van den Wijngaard (Clingendael Institute), addresses these rising challenges head-on. It outlines the dangers of an outsourced tech stack and presents actionable strategies to rebuild Europe’s digital foundations. From overhauling industrial policy to forging new international partnerships, the paper offers a roadmap to ensure the EU remains competitive, secure, and rooted in its democratic values in the digital era.

Why the EU Needs Its Own “Building Blocks”

The policy paper emphasizes that modern digital ecosystems depend on multiple layers, or “building blocks,” such as the raw materials required to produce chips, the networks and data centers that form the internet’s backbone, and the software that runs everything from AI chatbots to cloud services. Although the EU has traditionally excelled at regulation, it remains vulnerable in several areas.

• Critical Raw Materials (CRMs): China refines about 90% of rare earth elements—essential for manufacturing technology—from smartphones to high-performance AI chips.
• Chips and Hard Infrastructure: Overreliance on foreign players, including Taiwan-based TSMC for advanced semiconductors and US-based cloud giants for data storage, exposes Europe to potential supply chain disruptions.
• Soft Infrastructure: Most European organizations, including governments, rely on American cloud providers (Amazon, Microsoft, Google). This dominant external control raises security concerns, especially under the lens of an increasingly uncertain geopolitical climate.
• Data and Applications: US tech firms hold significant sway over the European consumer market, fueling a digital trade deficit and limiting room for local innovators to scale.

According to the authors, the EU’s outsourced tech stack makes it prone to geopolitically driven coercion. Tech-savvy competitors could disrupt vital infrastructures—such as government databases—especially if hosted abroad. Moreover, the growing power of a few “Big Tech” players poses fundamental questions about EU core values around data privacy, democracy, and fair competition.

Action Points and Policy Recommendations

To reduce these vulnerabilities and foster European economic security, the policy paper offers concrete strategies:

• Mantain Strategic Indispensability through Focused Funding: Leverage existing tech champions, exemplified by ASML in lithography equipment, to maintain leadership in critical niches. Direct EU-level funding and industrial policy toward areas where Europe can be “indispensable” rather than trying to compete everywhere at once.
• Develop EU-based Soft Infrastructure: Expand support for European cloud providers—such as OVHcloud, STACKIT, and others—via updated public procurement processes that favor local solutions, especially in sensitive sectors like public administration and healthcare.
• Enhance Supply Chain Resilience through Diversification: Diversify imports of critical raw materials and chip components, collaborating with resource-rich regions in Africa and Latin America while also partnering with likeminded markets (e.g., India, Japan) to foster more balanced supply chains.

Rebalancing Europe’s digital ecosystem is a complex but urgent task. For policymakers, tech leaders, and citizens, the message is clear: Europe can secure its digital sovereignty only if it invests in robust local innovations and diversifies its international partnerships. 

Read the entire policy paper here.