A spatial dimension of the EU Foresight Report 2023?

July 2023

The EU Commission published a new Foresight Report (Si apre in una nuova finestra) in early July. It focuses on the intersections between social and economic sustainability challenges. This helps to clarify potential choices and trade-offs that the EU is likely to face in the future.

Unfortunately, the territorial dimension is not addressed explicitly. Still, it stimulate to think about possible territorial futures and a territorially balanced transition.

The spatial implication of the points made in the foresight report provides strong arguments for looking more seriously at the future of cohesion policy and also need for a green and just Europe which offers a future for all pace, as stressed in the Territorial Agenda.

Key challenges and areas for action

The foresight report identifies 6 key challenges for the EU’s sustainability transition:

• Demand for future skills. Growing skill disparities and lack of adequate competencies may hamper the green and digital transitions and adaptability of citizens. As pointed out in the report, given demographic trends and the decline of the working age population, about 82 EU regions accounting for 30% of the European population may face a talent development trap.

• Quest for net-zero and well-being. The report underlines that a net-zero society and increased well-being can go together. To achieve this, our economic model requires transformative changes. Rising social and economic pressures aspects fuel the debate about the need for a new economic model, focused on the well-being of people and nature. This refers also to the debate and growing number of policy frameworks testing ideas to go beyond GDP.

• Threat to democracy. Times have changed since the mid-20 century when our current social contract was established. It no longer fits our new ways of learning, working, and living, and the demographic change and migration patterns. If we do not adjust our social contract to those new socio-economic realities, democracy as the main form of government risks being increasingly challenged.

• Eroding social cohesion. The effects of climate change as well as the effects of many transition processes are likely to affect places and people unequally and have disproportionate impacts on the poorest and most vulnerable. The green transition of the EU can only be successful, if it enables people to participate in and benefit from it. Otherwise, eroding social cohesion will threaten trust in governments and the viability of the transitions.

• Pressure on funding. Both the green transition but also growing numbers other strategic investments, e.g. related to the digital transition or geopolitical actions, require unprecedented levels of investments. At the same time, public budgets become increasing constraint not at least due to demographic change. As pointed out the report, the old-age dependency ratio could grow from 34.4 % in 2019 to 59.2 % in 2070, affecting both tax incomes and public expenditure on elderly care.

• Rise of geopolitics. As a new geopolitical landscape emerges, globalisation as we know changes fundamentally. This concerns both trade patterns as well as multilateral cooperation and the global ‘battle of narratives’. In the end it challenges Europe’s economic security as well as global cooperation on the green transition.

Responding to these 6 challenges, the foresight report identifies 10 key areas for action for the EU sustainability transition:

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 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 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.

Territorial focus needs to be strengthened

Europe faces increasing disparities between places and people. The territorial implications of the key challenges and actions outlined in foresight report risk to further accelerate these disparities.

Unless targeted actions are taken, many of the above challenges risk to further increase disparities and move away from the objectives of a desirable future for all places expressed in the Territorial Agenda. Growing skills disparities, transformative changes to ensure sustainability and adjustments to the new geopolitical landscape are very likely to have spatial patterns which give a leg up to those better prepared and already now leading the way. This risks to increase social and spatial disparities, as those already struggling may fall further behind. In many cases, this will e.g. strengthen thriving urban areas and some prosperous rural areas, and imply additional development obstacles for urban areas facing development traps and for depleting rural areas. Taking into account the latest report on the geography of discontent, it also implies that these trends further fuel the erosion of social cohesion and threat to democracy.

In short, the challenge identified in the foresight report call for responses reflecting their territorial implications and risks of widening the disparities between places and people in Europe. This is particularly challenging in times of increasing constraint public funding.

First of all, Europe needs a wider debate on the expected territorial impacts of these challenges. This can inform decisions of how to meet the challenges making best use of diverse territorial potentials within the EU but also ensuring that the challenges do not drive places and people in Europe further apart.

In the same way as the challenges, also the key areas for actions will play out differently across the European territory. In order for them not to further accelerate territorial disparities their potential territorial impacts need to be assessed carefully. Based on that target measures complementing these actions need to be defined to ensure they not just ‘do no harm to cohesion’ but help to narrow the disparities between people and places in Europe.

This calls for a strong policy complementing these actions to ensure cohesion. It also makes the EU aim of economic, social and territorial cohesion ever more relevant. If we want to avoid the EU to grow apart driven by increasing geographies of discontent, the territorial cohesion aim must be taken serious.  

This poses also issues concerning our understanding of cohesion and the necessity to think beyond cohesion policy. The EU needs to innovate to deliver on the foresight report and ensure cohesion.

Following the general understanding of cohesion, past discussions framed it often in terms of GDP, growth and jobs. This helped operationalising cohesion and providing comparable information. However, this does no longer capture the essence of it in today’s society, nor does it answer the quest for net-zero and well-being.

The idea of cohesion might be far more fundamental, touching the primary reason for public intervention in a democratic system, i.e. as an overall objective to make people’s life better. In this case, the ultimate purpose might be linked to people’s well-being, health, quality of life or harmony. This illustrates the diverse understanding and operationalisation of cohesion, leading to multiple approaches to cohesion, which all are valid. As we have outlined in an earlier blog post (Si apre in una nuova finestra), this raises questions about what we actually aim for – or rather what do we want to achieve – when we refer to cohesion.

Regardless the exact understanding of cohesion, cohesion policy is a necessary but not sufficient ingredient to achieve cohesion. It is a very abroad aim, and given the size of the cohesion challenges, it cannot be delivered by a single EU policy – however large it is. If cohesion is wanted in Europe, we need to mean it. We need more than cohesion policy & lipservice by other EU policies. This implies we need to identify complementarities between cohesion policy and other policies affecting cohesion. These complementarities need to be bi-directional. What can cohesion policy offer to achieve the objectives of other policies and what can these policies offer to achieve cohesion. Basically, we need to identify ‘policy tandems’, just as the single market and cohesion policy, where both policies need each other to be successful.

If left unaddressed, this will erode the cohesion and lead to a Europe which does not offer future perspectives for all places.

Furthermore, thinking big, this would require embedding a shared spatial vision (or narrative) of cohesion and the territorial future of Europe in relevant policies and decision-making processes from local to European level. The ‘Cohesion Spirit Compass (Si apre in una nuova finestra)’ provides some first hints in that direction.

by Kai Böhme