Interesting things in the world of electronics served as easy to digest articles with a touch of wit.

Given the centrality of semiconductor chips to modern economy and security, the race for self-sufficiency in the entire semiconductor supply chain ecosystem is not confined just to the US and China. Policy makers in the European Union (EU) have also made it a priority, framing it as part of their agenda for European ‘technological sovereignty’.

The shortage of semiconductors during the COVID-19 pandemic made the European leaders realise how dependent Europe was on East Asia for advanced chips. In her annual State of the Union address in 2021, the European Commission President Ursula von der Leyen called this dependence ‘not just a matter of our competitiveness’ but ‘also a matter of technological sovereignty’. To rectify the situation, she proposed a new European Chips Act ‘to jointly create a state-of-the-art European chip ecosystem, including production’ that would secure supply as well as ‘develop new markets’ for ground-breaking European technological innovations. She acknowledged that it was a ‘daunting task’ that some considered impossible, but it was time for Europe to ‘be bold again, this time with semiconductors.’

What is Technological Sovereignty?

To understand ‘technological sovereignty’, we need to first understand the meaning of the term ‘sovereignty’. To be sovereign is to have supreme or ultimate authority to make decisions and laws within a defined territory. It is the defining attribute of modern state and forms the bedrock of international relations and law.

The concept of sovereignty emerged in the 16^th and 17^th century as a justification for absolute monarchies in many European countries. In Middle Ages in Europe, the kings were relatively weak with their power constrained by feudal lords as well as the Catholic Church that claimed the right to bestow divine blessing or to withdraw it by excommunicating the king and thus delegitimising his rule in the eyes of his subjects. Following the Lutheran Reformation, the influence of the transnational Catholic Church and the Holy Roman Empire weakened and religious wars raged in Europe, killing millions of people. In these circumstances, political thinkers such as Jean Bodin (1530-1596) and Thomas Hobbes (1588-1679) argued that order and stability could only be guaranteed if there existed a single source of law or ‘sovereign’ within a territory. The power of such a sovereign had to be absolute, indivisible, inalienable, and permanent to ward off threats of anarchy and civil war.

This new idea of the monarch’s absolute sovereignty over territory, along with legal equality of states as basis of relations between them, was accepted in the Peace of Westphalia 1648 that laid the foundation of the modern inter-state system. It made the monarchs absolute sovereigns in their dominions who could determine their domestic religion and policies without any interference from the Pope or the Holy Roman emperor.

Thus, sovereignty can be understood to have two aspects:

1. Internal Sovereignty or the monopoly over legal authority to make decisions that are binding on all individuals, groups and institutions within the state’s territory. With the advance of democracy and constitutionalism, it is now expressed in terms such as ‘popular sovereignty’ and, in Britain, ‘parliamentary sovereignty’.
2. External Sovereignty or the capacity of the state to act independently without any external control or oversight.

Clearly, the concept of external sovereignty is closely linked to national independence, self-rule, and self-determination. It is ultimately the ability of the nation to determine its own destiny without any foreign interference. Any threat to external sovereignty is a threat to the nation’s freedom to manage its own affairs according to its own interests, aspirations, and values.

In reality, all nations are not equally powerful and big powers often pressure weaker states to take decisions which they would not otherwise take, thus violating their sovereignty. Despite this, the concept is of great significance and has inspired many freedom movements all over the world.

With the rise of globalisation from the 1990s onwards, however, the concept and its utility came to be increasingly questioned by many analysts. Innovations in communications technology and the growing global economic integration made global exchanges of goods, services, capital, ideas and information faster and cheaper. This has weakened the national governments’ control over internal policymaking as events and decisions taken thousands of miles away can profoundly shape a country’s domestic economy and policies.

Nevertheless, by the 2010s, concerns began to be raised about the level of control that a sovereign country exercised over its digital space and assets. In particular, national governments and the EU began to look for ways to regulate the Big Tech companies regarding illegal content and monopolistic practices, protection and localisation of citizens’ data (data sovereignty), and digital taxation. These and other measures to boost domestic digital capabilities and cybersecurity came to be framed as ‘digital sovereignty’ and was linked to ‘national sovereignty’ in terms of the need to assert sovereignty in cyberspace just as it is asserted in the physical domain.

The shortages of semiconductor chips during the COVID-19 pandemic made European leaders realise that ‘there is no digital without chips’ and that sovereignty is also important in key technologies and supply chains. This is ‘technological sovereignty’. In many EU policy discussions, ‘digital sovereignty’ and ‘technological sovereignty’ are used interchangeably but there is a distinction between the two. While ‘digital sovereignty’ refers to the ability of a country to independently exert control over the digital domain and its data, ‘technological sovereignty’ is a broader concept encompassing all critical sectors where foreign technological dependency could be weaponised against the country.

Since 2019, references to ‘European sovereignty’ and ‘technological sovereignty’ have become increasingly common in EU official documents as well as in political rhetoric. What explains this?

Europe’s quest for Technological Sovereignty: Catching up with the US and China

In the 1950s, it was the fear of falling behind that propelled Western European nations to come together and ultimately integrate into the EU. In the last decade, the same fear of declining competitiveness and shrinking global influence is driving EU’s policies to pursue digital and technological sovereignty. European policy makers are acutely conscious of the fact that Europe fell behind the US in the 1990s by failing to capitalise on the first digital revolution led by the Internet. As a result of this lag in the tech sector, the difference in prosperity between the two has grown substantially over the years. A 2023 report came to the ‘dispiriting’ conclusion that if this trend continues ‘the prosperity gap between the average American and European in 2035 will be as big as between the average European and Indian today.’

There is a growing realisation that Europe must close the innovation gap especially in advanced technologies with the US and China by formulating appropriate industrial, trade, and investment policies. As Europe’s workforce shrinks due to falling population, it has come to depend even more on emerging technologies to boost productivity and economic growth. The EU policy makers also feel that Europe needs to secure itself from geopolitical risks that could lead to sudden shocks and supply chain disruptions involving critical materials and technologies. Reducing foreign dependency in critical areas such as semiconductors is, therefore, seen as both an economic necessity and a matter of strategic imperative. In other words, ownership over critical technologies or ‘technological sovereignty’ is seen as indispensable for maintaining and enhancing Europe’s ‘strategic autonomy’ in global affairs.

How do the EU leaders and policy experts define and promote Europe’s ‘strategic autonomy’? We will discuss it in the next article.

Frequently Asked Questions (FAQ)

Ques: What is the European Commission?

The European Commission is the executive body of the European Union (EU) responsible for proposing laws, implementing policies, enforcing EU regulations, and managing the union’s budget. It represents the interests of the EU as a whole rather than individual member countries.

Ques: What is the difference between European CHIPS Act and the US CHIPS Act?

The European Chips Act and the CHIPS and Science Act both aim to strengthen semiconductor manufacturing and reduce dependence on foreign suppliers, but they differ in focus and scale. The US CHIPS Act provides large direct subsidies and incentives to boost domestic chip manufacturing and research in the United States. The European Chips Act focuses more on coordination between EU member states, improving supply chain resilience, encouraging investment, and increasing Europe’s share of global semiconductor production.

Ques: What is digital sovereignty?

Digital sovereignty refers to a country’s or region’s ability to control its own digital technologies, data, infrastructure, and online services without excessive dependence on foreign companies or governments.

European Union Series

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