The forthcoming EU Chips Act 2.0 seeks to balance two ambitious goals: fostering European technological sovereignty while strengthening regional long-term competitiveness through targeted investments. This challenge has become increasingly important as innovation policy is expected not only to enhance European competitiveness, but also to address widening regional inequalities and strengthen social cohesion amid growing public distrust in democratic institutions.

This challenge has become increasingly important as innovation policy is expected not only to enhance European competitiveness, but also to address widening regional inequalities and strengthen social cohesion amid growing public distrust in democratic institutions. Experience from the US CHIPS Act in the Rust Belt suggests that achieving this dual objective is more difficult than policymakers often assume. Large-scale innovation investments alone do not automatically generate public trust or convince communities that the envisioned transformations will be beneficial for them. To serve as a credible strategy for regional renewal, innovation policy must be tailored to local concerns and identities, complemented by visible social investment, and developed through meaningful engagement with local communities rather than promises of future prosperity or appeals to national technological priorities.

While the original European Chips Act focused primarily on strengthening Europe’s semiconductor research and innovation ecosystem and mobilizing investment, the new proposal shifts attention towards industrial scale-up, strategic projects, faster permitting, and the creation of “Semiconductor Regions of Excellence.” As implementation begins, the challenge is not only where semiconductor capacity should be built but how regional perspectives can shape innovation policy before those decisions are made. This brief offers six recommendations.

Recommendations

01 Do not treat technological sovereignty and regional development as an automatic win-win.
02 Integrate regional development into innovation policy from the outset.
03 Complement innovation policy with social policy to make regional benefits tangible early.
04 Build on local identities and narratives.
05 Plan for economic resilience, not dependency.
06 Plan now for how innovation policy may shape elections in three years, not three months.

Read the full policy brief here: English / German

This is a series published by the TUM Think Tank together with the TransforM Munich Center for Transformative Technologies and Societal Change.