STEP and the New European Strategy

STEP as Europe’s long-overdue response to technological dependence. How the programme opens a strategic window — and why it may not be enough without structural reform.

Author: Monica Bianco, Ecosystems Cooperation advisor -CRF Italy

Abstract

The Strategic Technologies for Europe Platform (STEP), launched by the European Commission in 2023, represents the EU’s first attempt to consolidate funding for critical technologies and reduce external dependencies. This article analyzes STEP as a strategic inflection point: a long-delayed recognition of Europe’s technological vulnerability, and a policy experiment in reshaping sovereignty through financial coordination. However, we argue that STEP, in its current form, is not a game-changer unless it is matched by structural reforms at institutional, educational, and territorial levels. Drawing on recent EU policy analyses, innovation studies, and geopolitical assessments, we explore the scope, limitations, and potential pathways of STEP as a tool for sovereign capacity building.

Introduction: Europe’s Moment of Reckoning

Technological sovereignty has emerged as a defining theme in the European Union’s post-pandemic strategy. The fragility exposed by supply chain disruptions, semiconductor shortages, and digital dependencies has triggered a policy reorientation. As stated in the European Commission’s 2023 communication: “Technological sovereignty is the capacity to act autonomously in key areas of strategic importance. This is essential for Europe’s security, competitiveness, and democratic stability” [1].

The launch of STEP—the Strategic Technologies for Europe Platform—reflects this shift. Designed as a central funding mechanism to support critical technologies, STEP aims to pool and streamline resources from multiple EU programs (Horizon Europe, InvestEU, Recovery and Resilience Facility, Digital Europe, etc.), channeling them into key sectors such as semiconductors, AI, quantum computing, clean tech, and biotech.

Yet the programme is as much a symptom as it is a solution: a reactive measure after decades of policy fragmentation and industrial delocalization.

Understanding STEP: Objectives and Design

STEP is intended to address four major gaps:

• Coordination gap: fragmented R&D and industrial policy across member states.
• Investment gap: insufficient funding for scaling strategic technologies.
• Sovereignty gap: dependency on third-country technologies (e.g. US cloud platforms, Asian chips).
• Territorial gap: unequal access to innovation infrastructures across regions.

To respond, STEP introduces the concept of “Sovereignty Projects,” defined as initiatives that contribute to “Europe’s long-term strategic capacity” [2]. These projects are supported via a new Sovereignty Seal, intended to signal priority status across EU funding channels.

While this represents progress, the budgetary scope is modest. The proposed budget, spread across several years and instruments, is limited compared to US and Chinese technology funds.

As Pisani-Ferry and Zettelmeyer note, “the STEP budget is symbolic compared to the size of the challenge” [3].

A Late Response to Deep Dependencies

Europe’s external technological dependence is not new. For over two decades, scholars and policymakers warned of:

• Digital platform dependency (US-dominated cloud and data services).
• Erosion of semiconductor manufacturing capacity.
• Weak vertical integration in energy technologies.
• Systemic underinvestment in deep tech and industrial R&D.

As early as 2013, the European Council noted the “urgent need to reduce strategic dependencies in key sectors” [4], but few concrete actions followed.

STEP thus represents a belated recognition of structural problems. As Mazzucato emphasizes, “Europe suffers from a policy architecture that supports R&D but not scale-up or mission-oriented deployment” [5].

Why STEP May Not Be Enough

While STEP addresses funding coordination, it does not resolve four critical structural deficits:

1. Territorial fragmentation: Innovation capacity is heavily concentrated in core regions (Germany, Benelux, Nordics), leaving Southern and Eastern Europe as peripheral implementers. Without regional empowerment, STEP risks reproducing old asymmetries.
2. Educational and technical decline: As Andreoni and Chang argue, “Europe has allowed its engineering and applied science base to erode, especially in regions without strong industrial policy legacies” [6].
3. Governance inertia: National and EU-level institutions often lack the agility to implement coordinated missions. Over-bureaucratization, slow procedures, and lack of cross-sectoral planning hinder systemic action.
4. Mission fragmentation: Without a coherent narrative linking green transition, digitalization, and reindustrialization to territorial development, STEP risks becoming another funding silo.

What Would Make STEP Transformative?

To become a true engine of technological sovereignty, STEP must:

• Be grounded in territorial innovation ecosystems, not just firms and national agencies.
• Be linked to educational and training reforms, especially in engineering, design, and systems integration.
• Foster public-private institutional platforms for mission co-creation.
• Integrate SDG localization, circular economy, and resilience planning into its technology roadmaps.

Conclusion: From Programme to Platform

STEP is a necessary, if delayed, initiative. It opens a window for Europe to confront its technological dependence. But to seize this opportunity, the Union must move beyond programmatic funding and engage in structural reform: educational, institutional, and territorial.

If STEP remains a technocratic coordination tool, it will deliver limited gains. But if reimagined as a platform for sovereign innovation, embedded in a multi-level governance and development agenda, it could become a turning point for Europe’s strategic autonomy.

References

1. European Commission (2023). Communication on the Strategic Technologies for Europe Platform (STEP).
2. European Commission (2023). STEP Proposal: Regulation and Explanatory Memorandum.
3. Pisani-Ferry, J. & Zettelmeyer, J. (2023). Europe’s Sovereignty Budget Is Too Small, Bruegel.
4. European Council Conclusions (2013). Towards a More Competitive Europe.
5. Mazzucato, M. (2021). Mission Economy: A Moonshot Guide to Changing Capitalism.
6. Andreoni, A. & Chang, H.J. (2019). Industrial Policy in the 21st Century. Cambridge Journal of Economics.