After our report to the European Commission to develop a system for using foresight to develop EU R&I in which we developed four global scenarios for 2040 and expanded on these in 10 different global regions, we continue to take a close interest in their foresight activities. In December, the EC published its second annual Strategic Foresight Report, ‘The EU’s capacity and freedom to act’, that builds on the 2020 report which introduced resilience as a new compass for EU policymaking. The 2020 report explored four dimensions: social and economic, geopolitical, green, and digital and analysed the EU’s resilience in response to the COVID-19 crisis in the context of the acceleration or deceleration of relevant megatrends.
The foresight process included consultations with Member States and discussions with partners in the European Strategy and Policy Analysis System, a literature review, Delphi survey (involving Commission services, the European External Action Service and relevant stakeholders from academia, industry, civil society, public administration and international institutions) and scenario building.
The report examines emerging issues, uncertainties and choices that will shape the future of Europe and the world. It identifies four megatrends:
The first of the megatrends is climate change and other environmental challenges. They particularly note its effects on:
- Migration: weather-related events displace around 23 million people each year; by 2050, climate-related disasters could mean that over 200 million people need humanitarian assistance every year.
- Water and food security: Spain, Italy, Germany and Poland are already experiencing water stress; it will cause increased food insecurity and price shocks, with over 40% of the EU’s agricultural imports becoming highly vulnerable to drought by 2050. The agricultural activity zones will not move northwards because higher average temperatures in Northern Europe will be accompanied by the risk of increased cold waves caused by a weakened Gulf Stream.
- Biodiversity loss and change in the nitrogen cycle: agriculture is causing far greater change to the nitrogen cycle than the modification of the carbon cycle resulting from greenhouse gas emissions. This affects freshwater, coastal areas and human health, with huge economic consequences, as much as €3.5-18.5 trillion per year in ecosystem services from 1997 to 2011 and an estimated loss of €5.5-10.5 trillion per year due to land degradation. There are also major risks from invasive species and loss of pollinators.
- Public health: challenges include infectious diseases, advanced antimicrobial resistance, non-communicable diseases (cancer, diabetes or obesity), and mental health problems. In addition, with climate change certain diseases (malaria or dengue) will become more prevalent further north.
Next the report considers digital hyperconnectivity and technological transformations. The authors are concerned that, despite Europe’s current strong position (it accounts for almost 20% of the world’s total research and development, publications and patenting activity), it lags behind global competitors in private investment into research. It is behind major countries in AI and key quantum technologies. Other areas to address include microelectronics and green technologies, such as hydrogen and advanced fusion-based nuclear reactors. Massively increasing connectivity radically changes many industries, products, technologies and services, but also brings risks of cyber-attacks. Automation could means 14% of adult workers’ jobs are at risks and although new jobs will appear, they will require new skills – managing the social disruption will be a challenge.
The third megatrend was pressure on demographic models of governance and values. 2020 was the 15th consecutive year of a decline in political rights and civil liberties at a global level and democratic governance is declining across the world. Geopolitical contestation and inter-state polarisation are increasing and zones of instability and conflict close to the EU are likely to persist. Large-scale disinformation online will increasingly drive a new type of information warfare, threatening democracies, polarising debates, and putting health, security and the environment at risk.
Last, the report considers demography. Population will decline in the advanced West and in East Asia, with Asia as a whole reaching an inflection point around the middle of the century. Sharp rises in total-age dependency ratios are projected for many EU areas – by 2050 there may be 135 dependent non-workers for every 100 workers in the EU. With the changing demographic pattern comes changes in economic power, and hence geo-political power generally. However, Increased inequalities, lower environmental and labour standards remain key challenges for emerging economies.
The energy transition will further contribute to the redistribution of power. Fossil fuel exporters will lose out to countries with a large capacity to generate and export renewable energy. The EU can expect continued tensions with China and Russia; new tensions could arise in contested areas, such as space or the Arctic; organised crime, extremism, terrorism, and the “weaponising” of migration for political purposes, could increasingly threaten EU security. In this context, an increasingly multi-polar world will challenge the effectiveness of global governance structures.
These four megatrends correspond quite closely to SAMI’s own megatrends. We would argue that the demographic shift will lead to a change in attitudes in the West towards being more welcoming to immigration. We also think there are generational changes in attitudes that could lead to more positive outcomes. The full power of the biotechnological revolution has yet to be seen, and AI could radically shift economic power – the global competition in that field is indeed critical.
On top of the megatrends we should consider “wild cards”. As well as further pandemics, massive climate events and global geo-political flashpoints, one can imagine a major technological failure of satellite systems, or the collapse of the communist party in China. Medical advances could increase life expectancy to the extent that ageing populations become a major challenge.
The later section of the report turns to policy proposals, identifying ten strategic areas the EC should address. These include ensuring sustainable and resilient health and food systems; securing and diversifying supply chains, especially for critical raw materials; more assertive EU “standard-setting”; developing and retaining advanced skills and talents; and trying to buttress multilateralism.
Finally they comment that uncertainty, volatility, complexity and ambiguity will increase. Developing strategic foresight capabilities will be needed to assess the impending risks and better prepare to deal with crises and emerging opportunities. The EU Foresight Network of Ministers for the Future, and the related development of foresight capacities at national level, will be contributing to this. The next Strategic Foresight Report will focus on a better understanding of the twinning between the green and the digital transitions, i.e. how they can mutually reinforce each other, including through the use of emerging technologies.
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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