The European Commission is investing £1.8bn in a 10-year research and development project into embedded computing.
The move is part of a European effort to grab a significant chunk of a global market growing at 14 per cent per year and estimated to be worth £45bn.
Computers are increasingly embedded in consumer goods such as cars, credit cards, passports, planes, phones, factories, washing machines and televisions.
The Commission said in a statement that embedded computers will account for more than a third of a car's value by 2010.
"More and more useful applications affecting the daily life of consumers rely on such embedded systems," said Viviane Reding, EU Commissioner for Information Society and Media.
"The new Airbus, for example, includes many embedded technologies from fly-by-wire to cabin pressure control."
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