Tag: Infrastructure

  • Europe’s tech sovereignty: building capacity where it matters

    Europe’s tech sovereignty: building capacity where it matters

    In brief

    Europe has an opportunity to build much stronger positions in cloud, AI and semiconductors. The European Commission's new technology sovereignty package points in that direction. It seeks to speed up permits, aggregate demand and apply different sovereignty standards to different levels of risk.

    The next step is execution. Funding, energy supply and measures of success still need sharper definition. My read: Europe should increase investment and engagement where it already has industrial strength, while keeping global partnerships open. That combination creates more choice and resilience.

    What the Commission has proposed

    On 3 June 2026, the European Commission presented four measures:

    • the Chips Act 2.0
    • the Cloud and AI Development Act, or CADA
    • the EU Open Source Strategy
    • a roadmap for digitalisation and AI in the energy sector

    The Chips Act 2.0 and CADA are proposals, not final law.

    Commission President Ursula von der Leyen framed the case clearly:

    "We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure."

    That is the right starting point. Europe can create more options for critical services by expanding local capacity and working with a broader set of trusted partners.

    Chips Act 2.0: more speed, no firm funding plan

    Silicon wafer transitioning into a series of advanced semiconductor packages
    The Chips Act 2.0 aims to turn European research and industrial demand into scalable semiconductor capacity.

    The proposal aims to make Europe a more attractive place to design, produce and buy semiconductors. It includes:

    • a maximum approval period of 12 months for strategic projects
    • "Grand Challenges" for technologies such as AI chips
    • stronger links between chipmakers and European buyers
    • more joint procurement
    • a business-to-business platform for supply-chain monitoring

    The Commission says the first Chips Act mobilised more than €52 billion and created about 46,000 direct and indirect jobs.

    It expects the global semiconductor market to reach €1.37 trillion by 2030. AI-related components could account for about 70% of that growth.

    Those numbers show the scale of the opportunity. Europe now needs to convert policy into commercially viable capacity.

    The European Court of Auditors warned in 2025:

    "The Chips Act is very unlikely to be enough to reach the very ambitious Digital Decade target."

    The EU wants a 20% share of the global semiconductor value chain by 2030. The Commission's own forecast pointed to 11.7%, according to the auditors. That gap is a reason to focus investment more clearly, not to lower the ambition. The Commission controls only about 10% of the announced public funding, so success will depend on coordinated action by member states, companies and the EU.

    CADA: tripling Europe’s computing capacity

    Data centre module protected by four clean nested architectural layers
    CADA proposes four sovereignty levels so protection can match the risk of each workload.

    CADA aims to at least triple EU data-centre capacity within five to seven years. It also addresses access to energy, land, water and capital.

    The Commission proposes four sovereignty levels. They range from EU-based data processing to full control of the software supply chain.

    I think this tiered approach is sensible. A public website does not need the same protection as health records or a national power grid.

    The opportunity is to make European capability more competitive without making origin the only criterion. Non-European providers can remain part of the mix when infrastructure, encryption, interfaces and exit terms meet the required standard.

    Open source: turning shared technology into European scale

    Modular digital products supported by an open framework and a maintenance tool
    Open source creates strategic value when Europe funds maintenance, governance and commercial scale.

    The Open Source Strategy covers development, deployment and long-term maintenance. It proposes procurement guidance, business support and a maintenance instrument for critical components.

    Open source can give public administrations and companies more control, better interoperability and lower switching barriers. Europe should capture more commercial value by helping maintainers and companies scale products in cloud, AI, cybersecurity and operating systems.

    The test will be professional execution. Critical open-source software still needs accountable owners, security updates and reliable funding.

    Energy and AI: building both sides of the equation

    Data centre connected to wind, solar and electricity-grid infrastructure across Europe
    Europe can combine data-centre growth with grid intelligence, renewable energy and industrial automation.

    The energy roadmap connects digital ambition with physical infrastructure. It covers grid optimisation, energy efficiency, demand flexibility and data-centre integration.

    Data centres currently use about 2.5% of EU electricity. In Ireland, their share exceeds 20%. The Commission is therefore developing tripartite agreements between data-centre operators, energy companies and public authorities. It has also launched AI.grids, a pan-European AI model for electricity networks.

    This is where Europe can combine two strengths: industrial automation and energy-system engineering. The Commission estimates that digitalising energy could create €71 billion in annual consumer savings and more than €300 billion in wider system benefits.

    Where the package creates momentum

    • The Commission creates a reason to invest. It says more than 80% of important digital products, services, infrastructure and intellectual property currently come from outside the EU. That leaves significant room for European suppliers and partnerships to grow.
    • Some targets are measurable. A 12-month permit period and a tripling of computing capacity can be tracked.
    • Demand receives more attention. Joint procurement and early customers could help European start-ups scale.
    • Open source is treated as infrastructure. That can improve control and make switching providers easier.

    Where execution needs to improve

    • Funding needs to become more specific. Announced investment is not the same as an available EU budget.
    • Europe needs to measure commercial outcomes alongside programmes and funding commitments.
    • Member states should concentrate capital in the strongest industrial clusters instead of competing for identical projects.
    • Energy policy must advance with digital policy. Chip plants and data centres need power, grids, cooling and water.
    • Europe should pursue strategic capacity with global partners rather than full autonomy. The European Court of Auditors says complete autonomy is impossible in semiconductors.

    Andreas’s view

    My read on this: the package is a useful foundation for a more confident European technology strategy.

    Europe is right to connect chips, cloud, AI, open source and energy. It is also right to distinguish between ordinary and critical workloads. The next move is to turn that framework into investment, capacity and competitive products. Funding, ownership and success metrics need to become more precise.

    I would add operational measures to the 20% chip-market target: capacity for critical chip classes, the cost of changing cloud providers and the share of critical systems with a tested exit plan.

    Europe should dial up investment where it has an edge: semiconductor equipment, power electronics, industrial software and specialised chips. Public procurement can create early demand for competitive European products based on security, portability and total cost.

    The real test is whether European companies gain more choice, scale and freedom to operate under pressure. A stronger European technology base can deliver that without closing the door to global innovation.

    What I would watch over the next 90 days

    For leadership teams, five questions can turn this policy direction into a growth and resilience agenda:

    1. Do we know our critical dependencies across cloud, AI, chips and software?
    2. Does every critical system have a workable switch or contingency plan?
    3. Are data and applications classified by actual risk?
    4. Do contracts provide portability, data access and transparent exit costs?
    5. Are procurement, technology and risk teams making these decisions together?

    Technology sovereignty is the capacity to create, choose and keep operating when conditions change.

    Sources

    1. European Commission: Strengthening Europe’s Tech Sovereignty, 23 June 2026
    2. European Commission: Tech sovereignty package, 3 June 2026
    3. European Commission: Cloud and AI Development Act, 3 June 2026
    4. European Commission: Chips Act 2.0, 3 June 2026
    5. European Commission: EU Open Source Strategy
    6. European Commission: Strategic roadmap for digitalisation and AI in energy, 3 June 2026
    7. European Court of Auditors: Special Report 12/2025, The EU’s strategy for microchips
    8. Mario Draghi: The future of European competitiveness, September 2024
    9. European Commission: AI Continent Action Plan
  • The Return of Industrial Time

    The Return of Industrial Time

    For the last two decades, a lot of management culture has learned to think in software time.

    Build. Test. Release. Measure. Iterate.

    That operating logic changed how companies build products, how teams organize work, and how boards talk about speed. It made experimentation respectable in places that used to reward only long planning cycles.

    My read on this: that lesson is still useful, but it is no longer enough.

    A growing part of the strategic agenda is not moving on software time. Electricity grids, energy systems, ports, factories, semiconductor supply chains, defense production, railway capacity, industrial permitting, and resilient sourcing all run on a different clock.

    They require capital before certainty arrives. They depend on permits, suppliers, safety, skills, land, regulation, maintenance discipline, and long-term demand signals. They take years to build and decades to amortize.

    This is the return of industrial time.

    The interesting leadership problem is not choosing between speed and patience. It is knowing which clock a decision belongs to.

    The software clock changed executive expectations

    Software gave leaders a powerful idea: speed can reduce risk.

    If a team can release a small version quickly, observe real behavior, and adjust, it does not need to pretend that every answer is known upfront. That logic has shaped far more than product development. It influenced strategy processes, innovation portfolios, transformation programs, and investor communication.

    The software clock is visible in how companies now talk about pilots, minimum viable products, agile delivery, platform thinking, data loops, and continuous improvement.

    I think that mindset still has enormous value. Faster feedback improves capital allocation. Faster decision loops reduce internal friction. Better data can reveal what customers, suppliers, and employees are actually doing, not only what the organization hopes they are doing.

    But the software clock also creates a temptation: the belief that every important problem can be de-risked through rapid iteration.

    That belief breaks down when the strategic problem is physical.

    You cannot A/B test a power grid in the same way you test a landing page. You cannot scale a defense-industrial base with the same reversibility as a software feature. You cannot rebuild semiconductor resilience quarter by quarter. You cannot fix underinvestment in infrastructure with a sprint review.

    Industrial systems can and should become more digital, more transparent, and more adaptive. But their underlying constraints remain material. Increasingly, they come with a price tag and a lead time that no roadmap can compress.

    Industrial time is slower because reality is harder

    Power grid control room overlooking high-voltage transmission lines at sunrise
    Industrial time is slow because physical capacity, permits and infrastructure cannot be compressed into software cycles.

    Industrial time is not slow because managers are old-fashioned. It is slow because the work sits inside physical, financial, and institutional constraints.

    Three numbers make the point.

    Grids. The International Energy Agency has warned that grids risk becoming the weak link in the energy transition unless investment accelerates. Its grid report says annual grid investment needs to double to more than USD 600 billion by 2030, and new transmission lines routinely take 5 to 15 years to plan, permit, and complete. IEA Executive Director Fatih Birol put it bluntly: "We must invest in grids today or face gridlock tomorrow." In the United States, the Department of Energy's National Transmission Needs Study estimates the country must more than double regional transmission capacity by 2035. That is not a communications problem. It is a capacity problem.

    Europe's investment gap. Mario Draghi's report on European competitiveness matters because it turns a familiar policy debate into an industrial-time problem. Its headline figure – roughly EUR 750-800 billion of additional investment per year – is not just a financing number. It is a statement about the scale of energy, defense, deep tech, infrastructure, and productivity capacity Europe would have to build. The report's core message is that Europe needs a different growth trajectory, not just better language around competitiveness. That lands as a management signal as much as a policy one.

    Semiconductors. A chip ecosystem is not one factory. It is design capability, advanced tools, specialty chemicals, materials, packaging, testing, energy, talent, customers, and export-control exposure. The CHIPS Act logic itself reflects this: the United States put USD 52.7 billion behind domestic semiconductor manufacturing and research because capacity is a multi-year industrial problem. TSMC's Arizona build-out, which began as a USD 12 billion project and later expanded, is now reported as a USD 165 billion U.S. investment. In mid-2026, TSMC CEO C.C. Wei told shareholders it would be "a long time before we can meet customer demand".

    Advanced semiconductor fabrication campus with clean industrial equipment, logistics docks and power infrastructure
    Semiconductor capacity is an ecosystem of tools, materials, energy, talent and long ramp-up times.

    The same pattern appears in defense. Europe can announce higher defense ambitions quickly, but ammunition output, supplier depth, testing capacity, skilled labor, and common procurement cannot be improvised. NATO's Jens Stoltenberg described the need to "shift from the slow pace of peacetime, to the high-tempo production demanded by conflict". That is industrial time in one sentence.

    The binding constraint is no longer the speed of the interface. It is the speed at which physical capacity, capital, skills, and permits can be brought into being.

    What this looks like inside companies

    The point becomes clearer when you look at company cases.

    Ford's electric-vehicle build-out is one example. A product with heavy software content still depends on battery plants, cell production, equipment orders, supply chains, trained workers, and industrial ramp-up. Ford described BlueOval City as part of its more-than-USD-30-billion EV investment through 2025. That is not a quarterly optimization exercise. It is a multi-year industrial bet.

    Orsted is another. The company took an impairment of roughly USD 4 billion in 2023 and cancelled its Ocean Wind 1 and 2 projects in New Jersey after supply-chain inflation, higher interest rates, and permitting delays made fixed-price contracts uneconomic. CEO Mads Nipper pointed to "significant adverse developments" in the supply chain and said the company was "extremely disappointed" to cease the projects. The deeper point is that industrial-time projects front-load commitment, then absorb the variance of a multi-year supply chain.

    Boeing shows a different version of the same issue. After the January 2024 737 MAX door-plug blowout, the FAA blocked Boeing from expanding 737 MAX production until quality systems were fixed. Demand was not the bottleneck. Industrial integrity was.

    And TSMC's Arizona expansion shows why industrial capability cannot simply be copied from one geography to another. The company has had to manage cost and timeline pressure in the United States, with reporting around TSMC's Arizona build-out pointing to substantially higher U.S. construction costs than in Taiwan. A fab is not just a building. It is an ecosystem.

    These are not failures of intelligence. They are encounters with a clock that does not negotiate.

    The harder management problem: two clocks, one company

    I do not think the answer is to become slower.

    The harder task is integration.

    A company that only thinks in industrial time becomes too slow. It over-plans, protects legacy processes, and treats every decision as irreversible. It may preserve reliability, but it loses learning velocity.

    A company that only thinks in software time becomes careless. It mistakes optionality for strategy. It launches too many pilots, underestimates physical dependencies, and treats capital-intensive systems as if they can be refactored later without cost.

    The way I see it, modern leadership needs both disciplines.

    Digital speed matters where reversibility is high and learning is valuable: customer insight, forecasting, demand sensing, workflow automation, internal transparency, scenario modeling, and decision support.

    Industrial patience matters where reversibility is low and execution risk compounds: plants, grids, logistics nodes, critical suppliers, regulatory approvals, safety systems, and long-lived assets.

    The mistake is applying the wrong rhythm to the wrong problem.

    Capital allocation becomes the test

    Executive strategy room with industrial infrastructure model, digital dashboard, hourglass and analog clock
    The real management test is whether capital, skills and capacity line up before the next shock arrives.

    Industrial time turns strategy into a capital-allocation test.

    It is easy to endorse resilience in a board presentation. It is harder to fund redundant capacity, dual sourcing, inventory buffers, grid connections, cybersecurity hardening, supplier development, and workforce training before the next disruption makes the need obvious.

    The same is true at national scale. The Draghi investment gap and the IEA grid investment number describe the same uncomfortable truth: agreement does not build capacity. Capacity follows from committed capital, credible timelines, aligned incentives, and operational ownership.

    The question I would be asking myself is simple:

    Where are we pretending that a strategic dependency is only an operating cost?

    If energy availability can constrain growth, it is strategic. If a supplier bottleneck can stop production, it is strategic. If a missing skill base can delay execution for years, it is strategic. If regulatory approval, grid access, or logistics capacity determines market entry, it is strategic.

    Industrial time makes these dependencies visible.

    It also changes the meaning of efficiency. In software time, efficiency often means reducing waste, shortening cycles, and automating repetitive work. In industrial time, efficiency also means keeping enough capacity, redundancy, and competence to survive stress.

    A system optimized only for the normal case can be financially elegant and strategically fragile.

    Andreas's view

    My read on this: the next advantage is temporal discipline.

    The companies that do this well will not become nostalgic industrial planners. They will still use digital tools aggressively. They will use better forecasting, better data, better scenario models, and faster feedback loops to make long-cycle decisions less political and less blind.

    But they will also recognize that some commitments have to be made before certainty arrives.

    I don't think the next decade rewards organizations that simply move fast. It rewards organizations that know when speed is a learning tool and when early commitment is the real advantage.

    Three things I'm watching:

    • Whether Europe can turn the Draghi diagnosis into actual capacity: energy, defense, capital markets, compute, and industrial execution.
    • Whether AI infrastructure pushes grid access, power contracts, cooling, chips, and data-center permitting into the center of corporate strategy.
    • Whether companies start treating suppliers, energy, skills, and resilience as strategic assets rather than procurement line items.

    The telling indicator will be whether management teams can hold both clocks in their head at the same time.

    Move fast where learning is cheap. Commit early where capacity will be scarce. Use data to shorten decision cycles, but respect the physics of assets, infrastructure, and institutions.

    The world is becoming more digital and more industrial at the same time.

    That is the leadership rhythm I think matters now.

    Sources

    https://commission.europa.eu/topics/competitiveness/draghi-report_en

    https://www.iea.org/reports/electricity-grids-and-secure-energy-transitions

    https://www.iea.org/news/lack-of-ambition-and-attention-risks-making-electricity-grids-the-weak-link-in-clean-energy-transitions

    https://www.energy.gov/oe/national-transmission-needs-study

    https://www.semiconductors.org/chips/

    https://pr.tsmc.com/english/news/3210

    https://www.cnbc.com/2025/03/03/tsmc-to-announce-100-billion-investment-in-us-chip-plants.html

    https://www.tomshardware.com/tech-industry/semiconductors/tsmc-ceo-c-c-wei-says-it-will-be-a-long-time-before-we-can-meet-customer-demand-tells-shareholders-that-he-will-keep-prices-stable-refrain-from-implementing-price-hikes

    https://9to5mac.com/2023/08/04/us-made-tsmc-chips/

    https://corporate.ford.com/articles/electrification/blue-oval-city/www/

    https://www.cnbc.com/2023/11/01/orsted-axes-two-new-jersey-wind-projects-takes-4-billion-writedown.html

    https://www.faa.gov/newsroom/faa-halts-boeing-max-production-expansion-improve-quality-control-also-lays-out-extensive

    https://www.nato.int/en/news-and-events/events/transcripts/2024/02/15/press-conference

    • European Commission: The Draghi report on the future of European competitiveness
    • International Energy Agency: Electricity Grids and Secure Energy Transitions
    • International Energy Agency: "Invest in grids today or face gridlock tomorrow"
    • US Department of Energy: National Transmission Needs Study
    • Semiconductor Industry Association: CHIPS Act overview
    • TSMC: U.S. investment expanded to USD 165 billion
    • CNBC: TSMC total U.S. investment reported at USD 165 billion
    • Tom's Hardware: TSMC CEO C.C. Wei on customer demand
    • 9to5Mac / NYT summary: TSMC Arizona construction-cost premium
    • Ford: BlueOval City and EV investment
    • CNBC: Orsted offshore wind impairment and cancellations
    • FAA: Boeing 737 MAX production expansion halted
    • NATO: Defense industrial production remarks