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2023 Strategic Foresight Report: Focus on sustainability and wellbeing

Jul 6, 2023 , , , , ,

Brussels, 6 July 2023
Today, the European Commission presented the 2023 Strategic Foresight Report, which analyses how to put ‘sustainability and people’s wellbeing at the heart of Europe’s Open Strategic Autonomy’ and suggests ten concrete actions to achieve this aim.

The EU is engaged in a profound and ambitious transition to achieve climate neutrality and sustainability in the next few decades. This sustainability transition will be key to strengthen the EU’s Open Strategic Autonomy, ensure its long-term competitiveness, uphold its social market economy model and consolidate its global leadership in the new net-zero economy. To succeed, the EU will need to address several challenges and make choices that will affect our societies and economies at an unprecedented pace and scale.

The 2023 report provides an overview of the challenges we face and proposes ten areas for action to achieve a successful transition. To equip policymakers with economic indicators which also consider wellbeing, it proposes to adjust Gross Domestic Product (GDP) to take account of different factors such as health and the environment.

This approach will bolster the EU’s Open Strategic Autonomy and global standing in its pursuit of a resilient net-zero economy.

Overcoming key social and economic challenges

As it goes through the sustainability transition – which encompasses both economic and social sustainability ­– the EU is facing several challenges. For example:

  • Evolving geopolitical shifts are shaping public opinion and how governments across the globe act, challenging international cooperation on global issues, such as climate change or the energy transition.
  • The need for a new economic model, focused on the wellbeing of people and nature, decoupling economic growth from resource use and shifting to more sustainable production and consumption. Up to 75% of Eurozone businesses are highly dependent on natural resources. Economic, social and environmental sustainability are inextricably linked.
  • Growing demand for adequate skills for a sustainable future. The availability of workers equipped with appropriate technical and soft skills will be crucial for the EU’s competitiveness: 85% of EU firms today lack staff with the competences needed to navigate the green and digital transitions.
  • The sustainability transition requires unprecedented investments. Achieving it will depend on securing sufficient funding both from the public and private sectors.
Ten areas for action

Today’s report identifies ten areas where our policy response is needed to ensure that the sustainability transition remains focused on the wellbeing of people and society:

  1. Ensure a new European social contract with renewed welfare policies and a focus on high-quality social services.
  2. Deepen the Single Market to champion a resilient net-zero economy, with a focus on Open Strategic Autonomy and economic security.
  3. Boost the EU’s offer on the global stage to strengthen cooperation with key partners.
  4. Support shifts in production and consumption towards sustainability, targeting regulation and fostering balanced lifestyles.
  5. Move towards a ‘Europe of investments’ through public action to catalyse financial flows for the transitions.
  6. Make public budgets fit for sustainability through an efficient tax framework and public spending.
  7. Further shift policy and economic indicators towards sustainable and inclusive wellbeing, including by adjusting GDP for different factors.
  8. Ensure that all Europeans can contribute to the transition by increasing labour market participation and focusing on future skills.
  9. Strengthen democracy with generational fairness at the heart of policymaking to reinforce the support for the transitions.
  10. Complement civil protection with ‘civil prevention’ by reinforcing the EU’s toolbox on preparedness and response.
Next steps

The Foresight Report 2023 will be presented to EU Member States at the General Affairs Council of 10 July. Together with work conducted on foresight by the Spanish Presidency of the Council of the EU, the Commission’s report is also expected to inform the discussion of Leaders at the informal European Council in Granada in October 2023.

In November 2023, the Commission will co-organise, together with the European Parliament, the annual European Strategy and Political Analysis System (ESPAS) conference. It will be an opportunity to test and discuss key findings of the 2024 report on interinstitutional global trends jointly prepared by EU institutions, and reflect on the way ahead.

Background

Strategic foresight supports the Commission on its forward-looking and ambitious path towards achieving President von der Leyen’s six headline ambitions. As of 2020, annual Strategic Foresight Reports are prepared to inform the Commission’s priorities, the Commission Work Programme and its multi-annual programming.

This year’s report builds on earlier editions, which focused on resilience as a new compass for EU policymaking (2020), on the EU’s Open Strategic Autonomy (2021) and on twinning between the green and digital transition (2022).

The analysis presented in the 2023 Strategic Foresight Report is based on the inclusive and participatory foresight exercise conducted by the Joint Research Centre, complemented by broad consultations with Member States, other EU institutions in the framework of the ESPAS and with citizens through a call for evidence published on Have Your Say. The results of the foresight exercise are presented in the Joint Research Centre’s Science for Policy report: ‘Towards a fair and sustainable Europe 2050: social and economic choices in sustainability transitions.’

For more information

2023 Strategic Foresight Report: Sustainability and people’s wellbeing at the heart of Europe’s Strategic Autonomy

2023 Strategic Foresight Report webpage

Questions and answers on the 2023 Strategic Foresight Report

Factsheet

Website on strategic foresight

JRC Science for Policy report: Towards a fair and sustainable Europe 2050: social and economic choices in sustainability transitions

Quotes

The 2023 Strategic Foresight Report comes at a very timely moment. The Commission is putting forward an action-oriented analysis of the key challenges the EU will face as it goes through the sustainability transition. This analysis reflects our focus on the wellbeing of current and future generations, and the imperative need to protect our planet. We want to keep Europe at the forefront of the sustainability transition, leveraging our unique social market economy and global trade power. This will help strengthen Europe’s leadership in the world, and our ability to stand on our own while building strong partnerships with others: Europe’s open strategic autonomy.

Maroš Šefčovič, Vice-President for Interinstitutional Relations and Foresight – 06/07/2023
Source – EU Commission

Q&A on the 2023 Strategic Foresight Report

 

Brussels, 6 July 2023

1. What is strategic foresight and how did it contribute to the Commission’s work during this mandate?

Strategic foresight consists of exploring the future to support EU policymaking. It is about using collective intelligence in a structured and systematic way to help better develop possible transition pathways, prepare the EU to withstand shocks and shape the future we want.

Throughout this Commission’s mandate, strategic foresight has helped to progress on President von der Leyen’s six headline ambitions. Annual Strategic Foresight Reports inform the Commission’s priorities, work programme and multiannual programming. In addition, other tools have been developed such as horizon scanning, and the use of foresight in Better Regulation was increased. This has helped to support the transition-led political agenda and make sure EU policies are fit for the future. It has inspired specific action, for example boosting resilience in the context of the European Semester and supporting initiatives such as the European Chips Act and the Critical Raw Materials Acts.

2. What process led to the 2023 Strategic Foresight Report? Did it include representatives outside the Commission?

The 2023 Strategic Foresight Report draws on a participative and inclusive foresight exercise conducted by the European Commission’s Joint Research Centre. It included the creation of foresight scenarios describing alternative versions of the EU’s sustainable future by 2050 as well as the use of ‘backcasting’ and other foresight methods. The foresight process also included consultations with experts and stakeholders, discussions with Commission services, agencies and joint undertakings, the publication of a call for evidence, and discussions with other European institutional partners (within the European Strategy and Policy Analysis System) as well as with Member States through the EU-wide Foresight Network.

3. How and why has this topic been chosen for the 2023 Strategic Foresight Report?

The four editions of the Strategic Foresight Report have followed a logical sequence. The first edition put forward resilience at the heart of policymaking (2020). The second focused on strengthening the EU’s Open Strategic Autonomy (2021). The 2022 report analysed the twinning of the green and digital transitions, stressing that inclusiveness and affordability will play a key role in achieving them, beyond and besides technological innovation. Among its areas for action, it outlined that the EU needed to reflect on new methods to measure progress, beyond GDP. This has been followed up on in this year’s report, notably with proposals towards adjusting GDP to take into account health, environment or social dimensions. This analysis will inform policies that contribute to achieving the EU’s objective of becoming the first climate-neutral continent by 2050. It will also help deliver on the EU’s ambition of building a fair and prosperous society where economic development is oriented towards greater sustainability, circularity and the protection of nature and people’s wellbeing.

4. What are the main findings of the 2023 Strategic Foresight Report?1

First, the 2023 Strategic Foresight Report identifies six key challenges that policymakers will face during the transition towards a sustainable Europe, encompassing social and economic aspects of sustainability. These are: the rise of geopolitics and reconfiguration of globalisation; the quest for a sustainable economy and wellbeing; increasing pressure to ensure sufficient funding; growing demand for skills and competencies for the sustainable future; increasing cracks in social cohesion; and threats to democracy and to the existing social contract.

Second, the report proposes ten areas for action that the EU will need to take, to reinforce a socially and economically sustainable Europe with a stronger role in the world in the coming decades. Those areas for action cover a broad range of policy areas, from designing a new social contract and leveraging the power of our Single Market to supporting changes in production and consumption for greater sustainability.. We also propose to strengthen the interlinkages between the EU’s internal and external policies to boost the EU’s offer and narrative on the global stage. We also aim at moving towards a ‘Europe of investments’, by attracting more private financing in support of strategic investments for the green and digital transitions. And, to better anticipate and therefore be better prepared for any future disaster or disruption, we recommend to complement civil protection with more ‘civil prevention’.

5. What are the main social and economic challenges in the transition towards a sustainable Europe?

The challenges identified in the report are the following:

  1. The rise of geopolitics and reconfiguration of globalisation: a new geopolitical landscape is challenging the foundations of multilateralism and the rules-based international order. This has consequences for Europe’s economic security and for global cooperation on transnational issues, such as climate change and the energy transition;
  2. The quest for a sustainable economy and wellbeing: the EU is at a key juncture which requires a joint push from policymakers and businesses to ensure a leading position in the global race to the net-zero industry;
  3. The increasing pressure to ensure sufficient private and public funding for sustainability: the green transition requires unprecedented investments. Overall, additional investments of about EUR 620 billion annually will be needed to meet the objectives of the Green Deal and of our REPowerEU plan, with an additional EUR 92 billion needed to address the objectives of the Net-Zero Industry Act over the 2023-2030 period;
  4. Growing demand for skills and competences for the sustainable future: growing skills disparities and a lack of adequate competencies could impede the green and digital transitions and the ability of citizens to take part in and contribute to these transitions;
  5. Increasing cracks in social cohesion: eroding social cohesion will threaten trust in governments and the viability of the sustainability transition; The lack of intergenerational solidarity on climate, economic, and societal issues may contribute to their political alienation and disillusionment with the capacity of the current political class and system to address generational challenges.
  6. Threats to democracy and the existing social contract. Inequalities are deeply linked with lower trust in national and EU institutions, as well as with liberal democracy at large. Failure to address the health of European democracies will challenge both the roll-out of sustainable policies and the sustainability transition itself.
6. How will achieving a sustainable transition affect the global role of the EU?

A successful and fair socio-economic transformation is not a given. Together with its twin, the digital transition, the green transition requires pivotal changes and trade-offs that will affect, among others, our economies and societies at an unmatched pace and scale. To succeed in this transformation, it is essential to recognise the links between the environmental, social, and economic dimensions of sustainability. This will enable Europe to pursue a forward-looking geopolitical strategy that successfully leverages its most valuable assets – namely, its unique social market economy and its position as the largest trading block in the world.

The EU should continue strengthening its coordinated framework to achieve Open Strategic Autonomy, including economic security. The EU also needs to ensure that its climate, environmental, and energy policies are designed and implemented in a consistent manner with the EU’s international ambitions and commitments. This entails taking into account the perspectives of its trading partners, as well as the impact of EU legislation on them. This could be achieved through increased dialogue, communication, diplomacy (green, digital, or cultural), and cooperation in their design and implementation.

7. Why is there a need to go ‘beyond GDP’ and present adjusted metrics for sustainability and wellbeing?

With recent developments such as climate change and the pandemic, it has become increasingly clear that GDP is incomplete as a measure of progress, as it does not fully reflect important environmental or social challenges. GDP as a measure of economic progress will remain important, but it needs to be complemented with indicators of sustainability and wellbeing. Having solid measures of wellbeing and environmental protection will be pivotal to measure progress towards sustainability.

The Commission has started internal work on methodologies for possible ways of complementing GDP, for instance by taking into account factors which are important for societal wellbeing such as health and the environment. The ongoing internal work is bringing together different strands of pre-existing work for the first time, with the aim of informing future EU policymaking. The report presents the first results from this pilot work towards an adjusted GDP. This medium-term project aims at the development of an adjusted GDP and its progressive embedding into policymaking.

8. What are the key recommendations stemming from the report?  

The report highlights that, to meet the social and economic challenges for the sustainability transition, the EU needs to act across a wide range of policies and priorities.

The ten priority areas for action are:

(1) ensure a new European social contract with renewed welfare policies and a focus on high-quality social services;

(2) deepen the Single Market to champion a net-zero economy, with a focus on Open Strategic Autonomy and economic security;

(3) boost the EU‘s offer on the global stage to strengthen cooperation with key partners;

(4) support shifts in production and consumption patterns towards sustainability, targeting regulation and fostering balanced lifestyles;

(5) moving towards a ‘Europe of investments’ through public action to catalyse financial flows for the transactions;

(6) making public budgets fit for sustainability through and efficient tax framework and public spending;

(7) further shift policy and economic indicators towards sustainable and inclusive wellbeing, including adjusting GDP for different factors;

(8) ensure that all Europeans can contribute to the transition by increasing labour market participation and focusing on future skills;

(9) strengthen democracy with generational fairness at the heart of policymaking, to reinforce the support for the transition;

(10) complement civil protection with ‘civil prevention’ by reinforcing the EU’s toolbox on preparedness and response.

 9. What are the next steps in the Commission’s strategic foresight agenda? 

The Commission will continue mainstreaming strategic foresight into EU policymaking, to support its transition-led political agenda, while increasing its ability to cope with potential future crisis and challenges. We will also draw lessons learnt and reflect on future foresight priorities.

In addition, the work carried out by a foresight cluster of Member States led by Spain, together with the Commission’s 2023 Strategic Foresight Report, will inform the discussion of Leaders in an informal European Council in Granada in October 2023.

On 14 November 2023, the Commission will co-organise, with the European Parliament, the annual conference ESPAS (European Strategy and Analysis System) conference.

For more information

2023 Strategic Foresight Report: Sustainability and people’s wellbeing at the heart of Europe’s Strategic Autonomy

Press release

Factsheet

Website on strategic foresight

2023 Strategic Foresight Report webpage

JRC Science for Policy report: Towards a fair and sustainable Europe 2050: social and economic choices in sustainability transitions

1 The translated versions of the 2023 Strategic Foresight Report will be available as of 30 July in all EU official languages.

Source – EU Commission

Remarks by Vice-President Maroš Šefčovič on the 2023 Strategic Foresight Report

 

Brussels, 6 July 2023

“Check against delivery”

Good afternoon, everyone. Thank you for coming.

I am pleased to present this year’s Strategic Foresight Report to you today.

The Commission is committed to making its policymaking more strategic by looking ahead. The annual foresight report does just that: it offers us the opportunity to weigh up our successes and plan for our next steps.

In times of rising insecurity and with open conflict on Europe’s border, strategic foresight enables us to better prepare for an uncertain future and anticipate developments which might impact on us. In short, it will help us make Europe more resilient.

This year’s report focuses on “sustainability and people’s wellbeing at the heart of Europe’s open strategic autonomy”.

It builds on the foundations of the first three reports, which focused on resilience [2020], open strategic autonomy [2021], and the “twinning” of the green and digital transitions [2022], respectively.

It evaluates key trends and future challenges affecting the EU’s policy actions across the social, economic and environmental dimensions of sustainability. And how these areas are linked to one another.

We are facing many challenges; such as: the rise of geopolitics, the need to ensure sustainability and the wellbeing of Europeans, securing sufficient funding for our ambitions, ensuring our workers are equipped with relevant skills for the future economy, the erosion of social cohesion; and threats to our democratic model.

Based on an analysis of the challenges we face, our 2023 Strategic Foresight report identifies 10 areas for action.

These will help us chart a path towards a sustainable transition that works for all.

I would like to briefly highlight some key findings in the report.

First, we face challenges in effective international cooperation. This is due to a “battle of narratives” which became a “battle of offers” and which is clearly now becoming a “battle of models”.

To put it in other words, we need to recognise that the time when liberal democracy was the model of obvious choice is over. Liberal democracies are increasingly being challenged by autocracies as the governance model best suited to deal with growing social-economic issues.

This translates into a quest for influence, including through support to third countries, be it for infrastructure, financing or on trade.

In this context, we need to promote sustainability in our diplomatic outreach and mutually beneficial relationships based on trust and facts.

One concrete idea is a future “green transatlantic marketplace” – a sort of free-trade area for net-zero technologies which can facilitate access to incentive schemes, prevent discrimination and thereby support green investments and sustainable production.

Second, we have found that sustainable and inclusive wellbeing needs to be front and centre in policymaking and economic indicators.

That means adjusting GDP, the standard way to track economic growth for nearly a century, to include aspects of wellbeing and sustainability.

As an example, we looked at what GDP might look like after taking into account life expectancy as a measure of health.

In this case, we could expect the EU’s adjusted GDP to increase by 15.5% by 2040, higher than that of countries such as the US, China or India.

We also call for a new European social contract that better prepares us for a sustainable future.

This would include further adapting our welfare policies and social protection to a rapidly changing world – for instance, to take into account new climate-related risks.

And we need to move towards a “Europe of investments”. We aim to increase private financial flows in support of strategic investments, allowing us to broaden the base for our green transition.

This can be achieved by using public funding as a catalyst for private investments, notably for riskier, breakthrough sustainability projects, including their scaling up.

This is why the European Investment Bank, the largest public bank in the world, should provide stronger support for strategic investments relevant for the green and digital transitions in key areas such as raw materials, green tech and biotechnology, especially for cutting-edge projects.

Lastly, we propose complementing civil protection for EU citizens with civil prevention. We plan to reinforce our disaster preparedness and response by implementing Early Warning Systems as a compass to guide Member States’ future investments and funding.

Source – EU Commission

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