The digital transformation is a key pillar of the new industrial strategy for Europe, with high expectations for its potential to relaunch Europe’s industrial leadership. It is also a key pillar of the ‘twin transition’, which the European Commission adopted as a defining element of its agenda for future sustainable growth. In this respect, the digital transformation must not be considered in isolation from the rest of the industrial strategy, but rather as an enabling process that must be consistent with the aim to develop human-centric, resilient and sustainable industrial ecosystems in Europe. Every policy choice, from those related to connectivity to the use of artificial intelligence (AI) and the collection and sharing of data, should be aligned with these principles and goals. Against this backdrop, the Digital & Data Working Group of the CEPS Industrial Policy Task Force developed policy recommendations in three key areas: 5G, AI, and edge/cloud computing. The recommendations reflect upon how technologies can become a driving force to support the digital transformation within the EU value system.