Europe’s tech skills shortage is holding it back

Europe’s tech skills shortage is holding it back

Feature articles |
By Nick Flaherty

A lack of focus on talent across Europe is significantly holding back the region says a new report and the president of SEMI Europe.

The study by European agency DigitalEurope paints a concerning picture of Europe’s performance in critical technology sectors, while SEMI Europe highlights the skills gap in semiconductors.  

“There aren’t enough people and the industry has an image issue, the sector does not benefit from full diversity, skills requirements are missing,” said Laith Altimime, president of SEMI Europe, speaking at the Leti Innovation Days in France last week. “Currently we have a 250,000 workforce in Europe and to reach the EU target of 20% [market share] by 2030 we need to double that.”

He points to the fourth era of technology, with AI, 5G and IoT from 2018 to 2025. “The AI derives the technology needs. For ERA 5 and Industry 5.0, quantum and neuromorphic computing is really needed. Data is to this century what oil was to the last, with autonomous, cloud edge computing.”

The study from DigitalEurope looks at ‘The EU’s critical gap: Rethinking economic security to put Europe back on the map’ and analyses the EU’s standing across eight of the critical technology areas outlined in the EU’s Economic Security Strategy – semiconductors, AI, manufacturing, quantum computing, energy tech, space tech, and advanced connectivity.

The talent shortage threatens the future, says the study. Europe faces a critical talent shortage in key areas like AI engineering, quantum computing, and additive manufacturing. This limits the capacity to compete and innovate in these rapidly evolving fields.

“The EU needs a refreshed approach to economic security. We are behind our global rivals in 7 of the 8 critical technologies,” said Cecilia Bonefeld-Dahl, Director-General of DigitalEurope, which brings together all the technical trade associations across Europe including TechUK , ZVEI in Germany, AMETIC and SEPE in Spain and AAVIT in Czechia and a steering board that includes Schneider Electric, Bosch, Intel, Siemens, Microsoft, Google, Nokia and Ericsson.

“Diagnosing our weak economic security as solely a supply chain security is only half true, and leads to the wrong treatment of the illness, relying only on restrictive trade and investment measures. The irony is that this only adds further burden to those European companies who are leading in their sectors, further weakening Europe’s position in the supply chain. Europe still has many strengths across the value chain, including world-class research, a strong manufacturing base and a thriving scale-up ecosystem. Yet we lack the ability to grow large successful tech companies, partly to a lack of investment,” she said.

Europe lags global rivals in 7 of the 8 technologies analysed, only leading in advanced connectivity, and even in this area, investments and profits are mainly captured by the US. In advanced manufacturing, energy tech, space technologies and quantum there are competences but there is no room for complacency as the EU could be rapidly losing ground. Skills are a key part of this.

“We are further behind in AI and advanced semiconductors, due to a lack of presence in key supply chain chokepoints,” she said.

While excelling in research and development across many technology areas, including in advanced connectivity, advanced semiconductors, quantum or space technologies, the EU struggles to translate it into manufacturing and commercialisation. This limits the ability to capture the full economic value of these innovations within Europe.

As well as a skills shortage, the study also reveals a significant shortfall in public and private investment across several critical technologies, particularly AI, quantum computing, and space tech. For example, private investment into AI start-ups and scale-ups in the EU is about one-seventh of that of the US, and about three times less than in the US for quantum.

The EU’s critical gap: Rethinking economic security to put Europe back on the map’

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