US, China and Europe: Who dominates in the critical technologies of the 21st century?

Projects such as the AI Act or the European Chips Act represent signs of awakening, but the implementation of the much-hyped Capital Markets Union - stalled so far - will be crucial to unlock investment on a continental scale. The challenge for Europe is not only technical, but also political: to succeed in moving from the role of global regulator to that of strategic player, with a common vision on innovation, industry and technological defence.

Having finished the overview of the global players, let us go into the five technologies that will define the new power relations in the 21st century, with a special focus on these three superpowers.

From industrial automation to strategic analysis, from military use to healthcare, AI is transforming every sector of society by acting as a geopolitical power asset, on par with nuclear deterrence.

The US maintains a significant lead, thanks to an ecosystem that integrates universities, venture capital and tech giants. OpenAI and Google DeepMind are leading the race with models such as GPT-4 and Gemini, which are increasingly accurate, versatile and popular even in the military.

However, China is pressing ahead. Thanks to a mix of massive data, local talent and targeted public investment, Beijing has made great strides. The release in 2025 of DeepSeek R1 showed computing power and accuracy that was until recently unthinkable for a 'non-Western' system. China excels in so-called 'raw human capital' - i.e. the absolute number of scientists and engineers producing high-level research - and has surpassed Europe in the number of AI-related scientific publications. The government has also integrated AI into industrial planning, urban surveillance, and public services, turning it into a systemic technology.

Europe, on the other hand, struggles. Despite the high level of education and quality of academic research - with excellences like the INRIA centre in France and open-source start-ups like Mistral AI - the continent suffers from a chronic lack of venture capital, a rigid regulatory environment (think of the impact of GDPR on model training) and fragmented innovation. The much-discussed AI Act, just passed, makes the EU a pioneer in regulation, but not yet in industry leadership. The risk, as the report warns, is to 'export values and import technology'.

One of the central nodes concerns computing power. Generative AI technologies require huge amounts of specialised chips (GPUs) and access to advanced cloud infrastructures. On this front, worldwide dependence on Nvidia and TSMC (Taiwan Semiconductor Manufacturing Company) remains almost absolute. No country, not even China, has yet managed to create a credible alternative.

One aspect that is often underestimated is the value of data. China, with its unrestrictive approach to privacy and gigantic population pool, generates huge amounts of raw data. The US compensates with industrial and military datasets of the highest quality. Europe, while having access to huge health and environmental archives, fails to make full use of them for regulatory and governance reasons.

The winner in the race for leadership in AI will not be the one who has the most patents, but the one who manages to integrate artificial intelligence into the very structure of their state and economy.

Innovations that now make it possible to modify DNA, create vaccines in record time or even bring extinct species back to life are redefining the boundaries between science and geopolitics. At stake are not just cures and better harvests, but the ability to protect populations, sustain economies and influence global balances.

In recent years, the pandemic has made it clear how crucial it is to have an advanced biotechnology ecosystem: countries that have been able to rapidly sequence the virus, develop effective diagnostic tests and produce vaccines (such as Moderna and BioNTech's mRNAs) have gained time, lives and competitive advantage.

There is a substantial balance between the US and China in the biotech sector. The Americans dominate in vaccine research, genetic engineering and safety, thanks to the dynamism of their private companies and established public-private partnerships such as Moderna.

On the other hand, China invests heavily in pharmaceutical production and relies on vast scientific human capital. The Chinese model is strongly state-led, capable of large-scale animal cloning, gene editing and diagnostic projects.

Europe is once again in the middle. It has excellences such as BioNTech (Germany) and Novartis (Switzerland), but lacks a unified strategy. Regulatory fragmentation and the delay in industrialising discoveries penalise it.

An across-the-board political fact is the dual risk of biotechnology. What can cure, can also be used to create lethal pathogens. This applies to civil as well as military laboratories. This is why governance - national and international - of biotechnology is now a strategic security issue, as well as an industrial one.

The lesson is clear: in a world where biology is programmed like software, those who control the genetic code control an important slice of the future.

At the heart of the technological competition between world powers, semiconductors represent the raw nerve of the economy and national security. Not only do they power every digital device, from the iPhone to electric cars, but they have become the key to artificial intelligence, quantum computing and next-generation military systems.

The US excels in chip design and machinery production, but is weak in manufacturing. China excels in large-scale manufacturing, but lags behind in advanced chips. Taiwan, with TSMC, is now the global leader in cutting-edge semiconductor manufacturing, producing up to 90% of the most sophisticated chips. South Korea and Japan complete the picture, dominating in several key segments, but also deeply exposed to the Chinese market.

This fragmentation is both a strength and a vulnerability. No country has full control over the entire supply chain, and every strategic player - from Washington to Beijing, from Berlin to Seoul - is engaged in a race to bring back critical pieces of the production chain.

In 2022, the US imposed strict controls on the export of chips and machinery to China in an attempt to slow down its technological advance. Beijing responded with billions in public investment, seeking to develop an independent domestic industry.

The Taiwan knot remains the most sensitive. Rising tensions in the Straits - with Beijing not ruling out military action - are of deep concern to the US and its allies, who depend on TSMC to fuel their digital innovation. The global semiconductor industry thus moves in an unstable balance between economic interdependence and growing geopolitical fragmentation.

Europe is also trying to play its game, late but with ambition: the Chips Act will mobilise over 20 billion to strengthen domestic production. Berlin has already attracted foreign investment and supports the emergence of advanced plants, although political uncertainties and project delays are holding back take-off.

From the semiconductor sector passes the very future of the global economic order.

The competition that once pitted the US and USSR against each other has evolved into a multi-stakeholder challenge, with new state and private actors ready to vie for the final frontier. Space is now a critical global infrastructure, indispensable for communication, navigation, remote sensing and defence.

The US leads the ranking thanks to a winning combination of public-private partnerships, industrial innovation and military might. SpaceX, with its reusable rockets, has revolutionised space launch; Starlink has made a global broadband constellation possible. And the US national security apparatus is increasingly integrating space technologies for command, control and surveillance.

But this leadership is fragile: Washington is asymmetrically dependent on vulnerable orbital assets. China and Russia are rapidly strengthening their anti-satellite capabilities, increasing the risk of an on-orbit arms race.

Among the emerging powers, India stands out, able to surprise with low-cost but high-tech missions such as Chandrayaan-3.

Europe comes fourth, thanks to the European Space Agency (ESA), which combines the efforts of 23 member states. Europe's strength lies in science and telecommunications, but limitations in terms of safety and independent launch capabilities remain evident. Reliance on external technologies, such as launchers from other countries, is an Achilles heel that only increased intra-European cooperation can overcome.

The countries that succeed in uniting research, industry and defence in one integrated strategy will be the ones that can influence the rules and future of Earth orbit and beyond.

Quantum is not a single technology, but a constellation of possibilities: from ultra-fast computational computing, to inviolable communication, to sensors capable of detecting with extreme precision even what today eludes radar and satellites.

The stakes are high: whoever dominates the quantum ecosystem will be able to overcome the current limits of simulation, security, pharmacology, metrology and artificial intelligence. It is therefore not surprising that the US, China and Europe have launched parallel programmes to secure a lasting lead in this field.

The US leads the ranking, thanks to a virtuous balance between academic research (MIT, Stanford), public investment (National Quantum Initiative Act) and private innovation (IBM, Google, Quantinuum).

China, on the other hand, relies on a centralised model, with strong public funding, national centres such as the Hefei Quantum Lab, and significant achievements in satellite quantum communication.

Europe, the third major pole, is moving in a more fragmented but complementary way. The EU's Quantum Flagship programme has created a highly cooperative multilateral research ecosystem.

The heart of the challenge remains the fragility of the ecosystem: investment in the quantum sector, although growing, is still low compared to other areas of technology.

Like space, quantum will be an enabling technology, destined to radically change power relations between countries, defence capabilities and the trajectories of science. But unlike other emerging technologies, its potential is still largely theoretical. And precisely because of this, those who invest today - in skills, facilities and collaborative networks - can write the rules of tomorrow's game.

In a world where power is increasingly measured in teraflops and patents, technological leadership will be the new global currency of influence. To date, the challenge seems to be a two-way game between the US and China, with Europe working as an interested observer.

(*) Eric Rosenbach is Professor and Director of the Harvard Belfer Center's Defence, Emerging Technology, and Strategy Program .

(*) Carlo Giannone is a Researcher at the Harvard Belfer Center and former BCG Consultant.