Brussels – European policymakers are increasingly focused on the strategic implications of government IT spending, recognizing its potential to foster a robust domestic tech ecosystem and reduce reliance on foreign technology providers. A key argument gaining traction is that public procurement isn’t simply about securing the best price for software and services; it’s a powerful tool for industrial policy, skills development, and bolstering digital sovereignty. This shift in perspective comes as concerns grow over Europe’s technological dependence, particularly on US tech giants.
The discussion centers on the idea that every euro invested in the public sector can generate a multiplier effect, stimulating broader economic activity. Still, this potential is currently being missed, according to experts, as a significant portion of European government IT budgets flows to companies based outside the continent. The debate is particularly relevant as the European Union navigates the implementation of the Cyber Resilience Act (CRA), a landmark piece of legislation aimed at strengthening cybersecurity standards for digital products sold within the EU.
The Strategic Cost of IT Procurement
Mirko Boehm, Senior Director for Community Development at the Linux Foundation Europe, has been a vocal advocate for a more strategic approach to public IT procurement. Boehm argues that policymakers should “require that every major IT procurement includes an assessment of strategic dependency.” He emphasizes that awarding contracts to large “hyperscalers” – a term commonly used to describe major cloud providers – isn’t solely an IT decision. “If a ministry in one of the member states signs a contract with a hyperscaler, that’s not just an IT decision, it’s an industrial policy decision, a skills development decision, a technology transfer decision, and a digital sovereignty decision,” Boehm stated in a recent webinar, as reported by The Linux Foundation. “These are all costs that are currently not considered in procurement.”
Boehm’s perspective aligns with a growing recognition within the EU that technological independence is crucial for economic competitiveness and national security. The European Commission has repeatedly stressed the importance of building a strong European digital infrastructure and reducing reliance on non-EU providers. This push is reflected in initiatives like the Digital Decade policy, which sets ambitious targets for digital transformation across the EU by 2030, including goals related to digital skills, digital infrastructure, and digital sovereignty.
The Multiplier Effect and Economic Impact
The argument for a more strategic approach to procurement is bolstered by the concept of the economic multiplier effect. Boehm contends that every euro invested in the public sector generates “multiples more” in subsequent economic activity. This suggests that prioritizing European companies, even if it means slightly higher upfront costs, could yield greater long-term economic benefits. However, quantifying this multiplier effect precisely is complex and subject to debate among economists.
The current situation sees a significant outflow of funds to US tech companies. While precise figures are difficult to obtain, reports consistently indicate that a large proportion of European government IT spending goes to American firms. This trend raises concerns about the loss of economic opportunities within Europe and the potential for technological dependence. The European Parliament has held several hearings on this issue, exploring ways to incentivize the adoption of European technologies and support the growth of domestic tech industries.
The Role of Open Source and the Cyber Resilience Act
The Linux Foundation Europe, under the leadership of General Manager Gabriele Columbro and Senior Director Mirko Boehm, is actively involved in shaping the debate around digital sovereignty and the role of open-source software. Gabriele Columbro brings over 15 years of experience building developer ecosystems, while Mirko Boehm has a long history as a free and open-source software contributor and community manager, with contributions to projects like KDE Desktop and the Open Invention Network.
Open-source software is seen as a key enabler of digital sovereignty, as it allows governments and organizations to control and modify the software they use, reducing dependence on proprietary solutions. The CRA, which was approved by the European Parliament in March 2024, is expected to have a significant impact on the open-source landscape. The Act establishes cybersecurity requirements for all digital products sold in the EU, including open-source software. It similarly defines separate roles for manufacturers and open-source software stewards, reshaping the relationship between foundations like the Linux Foundation and their member companies.
Boehm, speaking at a webinar hosted by the Linux Foundation Europe in April 2024, explained that the CRA requires a re-evaluation of responsibilities within the open-source ecosystem. The Linux Foundation is actively working to provide support and guidance to its members to help them navigate the new regulatory landscape. He is also a visiting lecturer and researcher on free and open-source software at the Technical University of Berlin, further demonstrating his commitment to the field.
Challenges and Future Outlook
Implementing a more strategic approach to government IT procurement faces several challenges. One key hurdle is the need to balance the desire for digital sovereignty with the principles of open competition and value for money. Policymakers must ensure that procurement processes remain transparent and fair, while also taking into account the broader strategic implications of their decisions.
Another challenge is the lack of readily available European alternatives to established US tech giants in certain areas. Building a competitive European tech industry will require sustained investment in research and development, as well as policies that encourage innovation and entrepreneurship. The EU is investing heavily in these areas through programs like Horizon Europe, its flagship research and innovation program.
The debate over government IT spending and digital sovereignty is likely to intensify in the coming years as the EU continues to implement the CRA and pursue its Digital Decade goals. The success of these efforts will depend on close collaboration between policymakers, industry stakeholders, and the open-source community. The next key checkpoint will be the full implementation of the CRA, expected to begin in phases throughout 2025 and 2026, with full application anticipated by 2027.
What are your thoughts on the EU’s push for digital sovereignty? Share your comments below and let us understand how you feel government IT spending can best support the growth of a thriving European tech ecosystem.