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THE STATE OF THE EUROPEAN UNION
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shaping a new social, employment and business
environment in which technology and innova-
tion play a central role. In this gradual hybridisa-
tion of the physical and digital worlds, brought
about by the total connectivity of people and
objects, citizens are changing their behaviour
and their consumption patterns. Their expecta-
tions of public services and of political leaders
are changing. Millennials are an increasingly im-
portant part of the target market, with digital
consumption habits that evolve as the internet
changes, and with a huge capacity for sponta-
neous association.
Rising consumer expectations mean that ef-
ficient operations are a key strategic asset of
any organisation. Digitalisation opens up new
ways of operating that bring about dramatic
shifts in the efficiency, speed or precision of op-
erations, whether informational (for example,
banking operations) or physical (such as manu-
facturing or logistics).
Finally, in a world where information has
greater strategic value than ever before, data
protection becomes a priority for both countries
and companies. Cybersecurity and authentica-
tion solutions are vital to protect organisations
against fraud and hacking attempts. A growing
number of critical public and private systems are
managed digitally, and this creates a need to
protect these systems, mapping out a likely bat-
tleground of the future.
In general, the inexorable shift from “sim-
ple” digitalisation (the computers of the third
industrial age) to collaborative innovation based
on combined technologies, amplified by the hy-
perconnectivity of people and things (the fourth
industrial revolution) is forcing social and eco-
nomic agents to consider how we are going to
face the future and be successful in the digital
era. The future holds exciting prospects. At the
risk of being labelled a “techno-optimist”, there
is the unlimited potential of millions of people
connected via mobile devices, with unprece-
dented processing and storage capacity, and
instant access to information and knowledge.
These developments provide a platform for
technological progress that creates an exponen-
tial multiplier effect through the development
of artificial intelligence, robotics, autonomous
vehicles, 3-D printing, nanotechnology, quan-
tum computing and biotechnology.
Obstacles to European innovation
leadership
Europe has been the birthplace of many of the
most disruptive innovations in the fields of sci-
ence and technology, and European companies
– since the start of the first industrial revolution
– have been technological leaders in their sec-
tors or have shared this leadership with their ri-
vals in other advanced economies, primarily the
USA. However, this position is clearly under
threat when we look at what has happened in
the digital era. Although Europe continues to be
home to some of the most promising and in-
novative scientific developments in the world,
its problems lie in the difficulty experienced
when converting these ideas into economic
value. In Europe, there is a gap between scien-
tific research and the economy which, in more
innovative regions such as the USA or some
Asian countries, is generally bridged by venture
capital funds, which help to transform great
ideas into profitable businesses.
Although interest in entrepreneurial activi-
ties has grown rapidly in Europe and the num-
ber of start-ups is rising across the continent,
very few of these manage to make the transi-
tion to become mature, global leaders of their
respective sectors. European entrepreneurial