Europe Wants To Put $32B Into Reviving Its Hardware And Electronics Industries

Europe has been focusing for a while on trying to revive its flagging hardware and manufacturing industries, and today the European Commission decided to put its money where its mouth is. It’s proposing a new investment package worth €25 billion ($32 billion) over the next seven years to drive more production and innovation in the areas of electronic components and systems design, including nano-electronics.

Among the goals for the initiative: “reverse the decline of the EU’s global share in the electronic components and systems area; maintain Europe’s leadership in areas as embedded systems, semiconductor equipment and materials supply, the design of complex electronic systems and e.g. energy efficient electronic components; to improve the environment, increase energy efficiency, increase security; to bring innovations in novel areas as cyber physicals systems; to put Europe’s best brains together to create effective research and innovation solutions; to build on Europe’s industrial landscape by supporting innovative SMEs [that is, startups] and strengthening clusters in promising new areas.”

To be clear, this is a hardware move that extends beyond what is traditionally thought of as consumer electronics technology. “Cars, planes, trains, medical and health equipment, home appliances, energy networks and security systems will all benefit from advanced European capabilities,” the EC writes in its announcement. But, as all of these different sectors become increasingly connected, and all physical objects essentially start to become different pieces of “hardware,” initiatives like these have wider tech implications.

The landscape into which the Electronic Components and Systems for European Leadership (ECSEL) initiative is coming is filled with a couple of cross currents. On one hand, some of the last remaining big companies, such as Nokia and Ericsson, continue to struggle against more agile competitors out of Asia.

But at the same time, there is a small but growing number of startups working in some of the more exciting frontiers of tech: they include the makers of the Raspberry Pi microcomputer; the ex-Nokia renegades trying to create a new smartphone player in Jolla; Internet-of-Things startup SmartThings; the Netatmo urban weather station startup; and Shapeways, the 3D printing company originally spun out from the Dutch electronics giant Phillips.

It’s unclear how much new and smaller initiatives like these will be directly (or indirectly) impacted by Europe’s proposals, which will see their first investments start in early 2014 with a budget of €4.8 billion ($6.1 billion).

As proof from past activities, the EC says that two pre-existing programs, described as Joint Technology Initiatives, “supported altogether more than 100 projects for a total cost in excess of €2.8 billion with a public funding of €1.126 billion (EU + Member States), involving more than 2,000 organisations (1,260 unique participations) of which around 40 percent are SMEs, 30 percent large enterprises and 30 percent research and higher education organisations.” JTIs will also be part of this larger ECSEL initiative going forward.

The news release, filled with lots of acronymed associations — ECSEL JTI is a merger of the ARTEMIS initiative on embedded systems and the ENIAC initiative on nano-electronics, and will involve participation from three industrial associations (ARTEMISIA , AENEAS and EPoSS), along with the 25 EU member states — doesn’t sound particularly encouraging in terms of being lean and fleet of foot. Still, the funding in play is significant so we’ll have to wait and see how it plays out.