2024 ESPAS GLOBAL TRENDS REPORT – 15th April – “Choosing Europe’s Future”
Maroš Šefčovič, Executive Vice-President for the Green Deal, Inter-Institutional Relationships and Foresight, EC and Marc Angel MEP, the European Parliament Vice-President with responsibility for ESPAS (European Strategy and Policy Analysis System) launched the 2024 ESPAS Global Trends report on 15th April. Entitled “Choosing Europe’s Future” it goes beyond an analysis of the way the world is changing to highlighting their implications and some of the choices that the EU faces, though it stops short of making specific policy recommendations as these lie in the remit of the politicians.
The report, the fourth of its kind, produced every five years, is timed to fit into the policy-making cycle of the EU, with European Parliament elections due in June and the appointment of a new Commission. The report has been worked on by an informal network drawing on a wide range of published sources, from EU entities, national and international bodies, local and regional governments, academia, think tanks and social partners, and takes as its target date 2040 – a lot will happen between now and then.
In his introduction, Maroš Šefčovič, noted that as the first Foresight commissioner appointed in 2019, he had been looking to embed foresight in policy-making. There was now an EU-wide network bringing collective intelligence and participatory foresight in co-operation with many “ministers for the future” and the European Parliament’s own foresight unit.
Recent years have been a roller-coaster – the pandemic, the Russian invasion, geo-politics generally – leaving EU economies exposed and facing competitive threats. “An era of polycrises”. This meant the need for even greater strategic capabilities to address challenging situations and face policy choices in geo-politics, green transition, the economic model and social contract with younger generations.
These policy choices had to recognise the reality of the EU’s position in a new environment: fragmentation of power, and the weakening rules based order. How does the EU position itself, when it is becoming less relevant demographically and economically, with a shrinking population and a smaller share of global GDP? How does it exploit its advantages to become a “Smart global power”?
This will entail partnerships around the world even with those we don’t always agree, eg on climate and biodiversity, which we can’t address alone.
Stephen Quest (Chair of ESPAS, DG Joint Research Centre)then introduced the report itself.
The report focusses on ten global trends. The trends are accelerating, and becoming more inter-connected, affecting multiple policy areas and increasing complexity. The ten trends are discussed below.
The report also identifies five inter-linked domains for strategic choices, looking to clarify where the choices lie. The EU can have agency in acting, things are possible. Not all outcomes are negative, there are opportunities too. These will be discussed in a future blogpost.
1 The geopolitical chessboard: a world in flux
As well as the current live conflicts in the Middle East and Ukraine, the global order generally is continuing to witness a fragmentation of global decision making and a weakening of multilateral institutions. There are sharpening ideological divisions, as narratives pitting ‘the West’ against ‘the rest’, or democracies against autocracies develop. New threats are emerging in areas such as dis- and mis-information, cyber-security and battles for primacy in outer space. Economic inter-dependence is leading to conflicts over resources and supply chain challenges, and an increase in “friend-shoring”.
The uncertain outcomes and implications of current conflicts are supplemented by the uncertain paths of middle-ranking powers such as Brazil, Nigeria, and the Philippines. Whether in mini-lateral agreements or more coherently as “The Global South”, these countries will challenge the Western narrative.
2 Mounting pressures on economic growth
Increased trade barriers and higher trade policy uncertainty could lead to significant reduction in global output. Costs may increase due to security issues affecting supply chains, and the green transition. China’s economic slowdown implies that by 2040 its weight in the global economy may stabilise or even decrease.
New technology could impact labour markets by creating education gaps and causing social exclusion. AI will have far reaching consequences for education while strategies to reskill and upskill the workforce may have to adapt very quickly to changing circumstances.
3 Uneven demographic ramifications
The EU’s population is expected to peak in 2026 at 453 million and fall moderately to around 450 million by 2040.16 In contrast, Africa’s population is projected to expand from 1.4 to 2.1 billion between 2023 and 2040. An ageing population will have a smaller proportion of working-age adults, and hence bring economic challenges between tax revenue and welfare payments.
How migration plays into the demographic equation is highly uncertain. Popular acceptance of immigration in the EU could either decline in the face of unmanaged flows or increase if the economic benefit of recruiting younger, fitter people is seen to be economically advantageous.
4 The environmental emergency
Europe is the fastest warming continent and unlikely to avoid exceeding the 1.5˚ C target. Annual greenhouse gas (GHG) emissions are likely to still be increasing well beyond 2040. Together with biodiversity loss (even collapse) and increasing pollution of plastics, we face a triple planetary crisis. Tipping points and feedback loops increase the threat.
Adaptation to extreme weather events will become costly with some areas uninsurable. Economic losses due to extreme weather and climate in the EU have been estimated at EUR 650 billion between 1980 and 2022, but over EUR 100 billion of losses were concentrated in just the last two years of this period.
5 Energy transition
Renewables currently supply around 20% of energy consumption, so there is a long way to go to get rid of fossil fuels. However, on some metrics renewables are cheaper than fossil fuels (which are kept at artificially low prices by means of public subsidies), and the transition could generate trillions of dollars of savings over the period.
Demand for minerals for batteries etc will grow rapidly, increasing costs – new technologies may be required. National grids need wholesale re-development and/or re-structuring. Nuclear fission has a role to play but fusion is unlikely to be operational by 2040 (if ever).
6 Equality: a complex and multidimensional picture
There is a growing wealth gap between the world’s richest and poorest. The share held by low-income countries of global wealth remains below 1%, even though they represent around 8% of the population. Wealth inequality leads to other inequalities – the poorest often live in more polluted areas and are more vulnerable to the health effects of pollution.
Progress in equality also varies across different groups of society – gender inequality, race discrimination, disabled people, LGBTQI+ groups. The rich are most likely to benefit from expensive genome-based medicine, whilst AI and other computing technologies may entrench share of income in ever-smaller groups of super-rich technology capitalists.
Inter-generational inequality is likely to require a new social contract to prevent radicalisation with opportunities for youth – will our children have a better life, or will they be poorer?
7 The nexus of technological convergence and acceleration
The deployment of new technologies is accelerating – in digital, biotech, and next generation materials. Technological convergence is fuelled by hyper-connectivity, across a wide range of products and sectors. Vast quantities of data analysed by AI bring new insights and opportunities in many fields – the economy, democracy, security, human health and wellbeing. But ethical concerns and high energy requirements represent some constraints.
Novel technologies such as nuclear, geo- and gene engineering, sea, or space mining bring their own controversies The possibility of increasing ethical and regulatory divergences across key global players adds more uncertainty.
8 Health: a global challenge
The burden of disease is concentrated in developing countries, while healthcare resources are concentrated in advanced economies. The health and economic impact of the pandemic increased this discrepancy. There are threats to health arising from the climate emergency – including the spread of zoonotic diseases, threats to food production systems, and even the possibility of ancient viruses emerging from permafrost. Antimicrobial Resistance has the potential to reduce global GDP by more than 2%; mental health issues and obesity are also on the rise.
Health care costs are rising. New technologies may bring new healthcare opportunities but also tend to be more expensive. Health-related Sustainable Development Goals – ending the epidemics of AIDS, tuberculosis, malaria and other communicable diseases by 2030 – look to be in doubt.
9 What will change in how we live and work?
Urbanisation continues, with the number of people living in cities potentially reaching five billion by 2050. This enhances productivity, but brings environmental and housing challenges. Climate change amplifies the issues with an expected 1.9 billion people, especially in cities, subject to heat stress by 2030.
Values and lifestyles are changing too. Greater awareness of climate change threats and greater acceptance of diversity are evident, with young women in particular becoming more liberal in their views. But social media “bubbles” means that increasingly people inhabit separate virtual spaces with divergent values, cultures, and content.
The worlds of work and education are being changed by AI and other technologies, becoming more flexible and tailored. The impact on employment is much debated with wide variations in estimates of jobs lost and created.
10 Democracy between threats and renewal
Globally, democracy is in decline: a third of the world’s population is subject to authoritarian rule; only 8% enjoy ‘full democracy’. There is a worrying degree of voter support for the idea of strong leaders who dispense with elections, and an emergence of anti-democratic attitudes among young people. Neo-nationalist movements and the spread of outright sectarianism are on the rise, while many people are simply opting out of the political process. On the other hand, there is greater mobilisation on single issues such as climate change.
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The ESPAS trends have many similarities with those produced by others, including SAMI’s own set of six: population dynamics, geo-politics and economic growth, climate breakdown and green technology, 4th industrial revolution, biotechnology and changing social attitudes. The way they are combined indicates their complex and inter-related nature.
The ESPAS report goes beyond simply identifying these trends and highlights the policy choices EU politicians will face. We will discuss these in a further blogpost.
Written by Huw Williams, SAMI Principal
The views expressed are those of the author(s) and not necessarily of SAMI Consulting.
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