[RESEARCH PAPER] European Sovereignty in Artificial Intelligence: A Competence-Based Perspective, by Ludovic Dibiaggio, Lionel Nesta and Simone Vannuccini

FOREWORD

This report addresses technological sovereignty in artificial intelligence (AI) within the European Union (EU). AI is widely regarded as a breakthrough technology, potentially dual-use1, and a strategic asset. AI is viewed as an essential driver of productivity and competitiveness in the near future, making it a key industrial priority amid growing international competition and rivalry. Insufficient investment in AI and related industries could jeopardize both economic growth and security, quickly turning AI development into a matter of national sovereignty.

Ludovic Dibiaggio, Lionel Nesta and Simone Vannuccini define technological sovereignty in AI as the ability of countries to mobilize and integrate AI-related competencies locally (that is, domestically). In other words, they offer a competence-based approach to assessing technological sovereignty in AI. Their objective is both descriptive and analytical.

Concerning the descriptive section of the report:

• The authors identify the key AI competencies along a series of steps involved in the production of and innovation in AI, from the most pervasive AI-related techniques, on through more concrete AI-related functions to the most concrete applications. We call this the Technique-Function-Application value chain (TFA value chain). They purposefully focus on a stylized value chain limited to AI algorithms, rather than the whole AI stack that includes data and compute infrastructure, as they are interested in the specific competences that enable core AI innovation.

• The report positions countries along the TFA value chain in terms of relative specialization, disentangling areas of relative strengths and weaknesses that can serve as a guide to design science, technology and industrial policies. The report provides ample evidence of country specialization in well-identified areas of AI. They authors opted to provide as much information as possible, even if it may occasionally feel overwhelming to the reader. They chose to include various descriptive graphs, tables, and names of key actors in the report to satisfy the curiosity of our
  readership.

From a more analytical viewpoint, the report provides two main outcomes:

• It develops country specific measures of integration along the stylized AI value chain, interpreting this metric as a proxy for technological sovereignty in AI. Using this approach, the authors perform cross-country comparisons of technological sovereignty across the entire value chain.
• The report provides evidence of integration enhancing innovation. Since integration within the AI value chain supports future innovation—and given that AI is increasingly established as a foundational technology—this is a strategic area in which technological sovereignty can be achieved.

In their analyses, the authors adopt a distinctly European perspective, offering a study that transcends national boundaries and assesses technological sovereignty in artificial intelligence (AI) on a continental scale. They identify a significant disparity between the European Union’s actual position and its potential for leadership in AI innovation and production. Currently, a divide exists, with the EU lagging behind global leaders in AI. However, on the potential side, coordinated policies, targeted investments, strategic division of labor, and skill development across EU member states could yield substantial returns, bolstering Europe’s competitive standing in AI.

About the authors:

Ludovic Dibiaggio is Professor of Economics at SKEMA Business School. He has also served as a research dean, founded the Knowledge Technology and Organization research center (KTO) at SKEMA Business School. Professor Dibiaggio has been the director of the Observatory of Technological, Economics and Societal Impacts of Artificial Intelligence (OTESIA) at Universit´e Cˆote d’Azur. His research interests include the organization of knowledge bases, the determinants of innovative performance at the firm, regional or national levels, and the social environments contributing to the success of creative projects, whether in contexts of social networks or crowdfunding platforms. His projects cover industries such as semiconductor, biotech and fuel cell, music and more recently artificial intelligence. He is a co-author of the report “AI, Technologies, and Key Players” and contributed to several articles on AI such as the OFCE Policy briefs “Ideas without scale”, “Artificial Intelligence: a Political Subject” published by Publika, or a chapter on AI in “L’économie française 2024” published by La Découverte.

Lionel Nesta is Professor at Université Côte d’Azur and a Researcher with GREDEG (CNRS-UCA). He is also an Associate Researcher at the OFCE (Sciences Po Paris) and SKEMA Business School. His research relates to major upheavals in modern economies (energy transition, digitization, globalization, etc.) and to their effects on corporate growth and market operations. At OFCE, Lionel Nesta has been Head of the Department for Research on Innovation & Competition from 2015 to 2020.

Simone Vannuccini is the Chaire de Professeur Junior (Junior Professor Chair) in Economics of Artificial Intelligence and Innovation at the Université Côte d’Azur (UCA), France. There, he and his team conduct research on a wide set of topics, all connected by the application of economic theory to emerging technologies such as (but not limited to) AI. Professor Vannuccini has been holding teaching and research positions at the Science Policy Research Unit (SPRU) of the University of Sussex, Imperial College London, the Friedrich Schiller University Jena (Germany), and the University of Insubria (Italy). Professor Vannuccini’s research interests focus on technology evolution, the economics of AI, industrial dynamics, science, technology and innovation policy, and the economics of digitization.