Europe's technology industry faces a restart
McKinsey study sees opportunities for up to $790 billion in additional value creation by 2030
Europe has significantly lost importance in the global technology, media, and telecommunications (TMT) market over the past decades. While the sector has grown strongly worldwide – currently valued at around USD 34 trillion – Europe's share fell from 30 percent to just 7 percent over the same period. However, a recent study by McKinsey & Company outlines concrete ways the continent could catch up and realize additional value creation potential of up to USD 2030 billion by 790.
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Structural hurdles and new framework conditions
According to the study, the decline in European market shares can be attributed to a number of structural factors: fragmented markets, investment deficits, limited capital availability, and regulatory hurdles. At the same time, new geopolitical realities, technological leaps, and increasing pressure for digital sovereignty are changing the situation – and opening up new opportunities for action.
A key finding of the study: Europe's technological sovereignty is increasingly becoming a key economic location issue. The development of resilient digital infrastructures, closer cooperation within the industry, and a targeted expansion of technological competencies are considered key factors for future competitiveness.
Focus on five key areas of action
The McKinsey study identifies five priority areas in which European companies could significantly increase value creation by 2030:
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Artificial intelligence and new software solutions
The greatest leverage lies in the development of scalable, AI-supported software solutions. With targeted investments in research, product development, and international acquisitions, a potential of around $310 billion could be unlocked in this area alone. -
Stronger focus on consumers in the digital B2C market
Consumer attention plays a key role, especially in digital media content and e-commerce. Individual content, analytics-supported sales strategies, and the use of AI to address target audiences are crucial to success. -
Expanding digital connectivity
For telecommunications providers and network operators, a key growth factor lies in the further expansion of 5G networks, the efficiency improvements of existing systems, and new partnerships. McKinsey expects annual growth of 4 to 6 percent in this area. -
Strengthening European cloud infrastructure
International providers currently dominate the European cloud market. Through targeted M&A activities and the development of an independent ecosystem, European companies can strategically catch up and secure new market share. -
Technology service providers as growth drivers
Service providers that position themselves as strategic partners in digital transformation – for example through industry specialization or the development of integrated solutions – will play a central role in the European tech ecosystem.
Combining optimism with realism
Despite the clearly recognizable potential, the study warns of a lack of realism: While 85 percent of the TMT executives surveyed believe Europe is fundamentally capable of taking a pioneering role, at the same time less than a quarter believe that the current starting position is sufficient for this.
According to McKinsey, the decisive factor will be whether political and economic measures can be strategically coordinated – and whether technological opportunities can be translated into concrete business value creation. The prerequisites are in place. So is the need for action.