Anticipating the future: Major risk clusters

November 2024

In a rapidly changing world, the European Commission's Joint Research Centre (JRC) has identified ten clusters of future risks that EU policymakers need to address. The report 'Risks on the Horizon (Abre numa nova janela)' underlines the need for proactive, ‘holistic’ strategies in face of complex, interconnected risks.

For its analysis, JRC has developed ten risk clusters, ranging from economic shifts to environmental challenges, which reflect potential threats that require careful consideration by policy makers. The idea is to provide policymakers with insights into potential futures and risks, helping them to make anticipatory decisions and build resilience to emerging challenges.

The ten clusters of future risks

A risk is the possibility of an undesirable effect associated with an event or activity. This encompasses potential negative outcomes of future events that can impact both society and policy.

Studying risks on the horizon aims to highlight trajectories that could lead to significant or systemic problems. For this, the report identifies ten overarching risk clusters and maps possible future developments that could lead to them. In brief, these are

• The breakdown of international cooperation. Rising nationalism, resource scarcity and a shift towards bilateral relations threaten multilateral cooperation. The erosion of global cooperation could lead to increased tensions and potential conflict.

• The decline of the EU economy. As emerging economies gain influence, the EU faces the challenge of maintaining its economic resilience in the face of setbacks such as recessions, rising inequalities and supply chain dependencies.

• Declining wellbeing. Factors such as pollution, health inequalities and climate stressors contribute to a potential decline in wellbeing, which includes physical, mental and social health.

• Disruption of critical supply chains. Global supply chains are increasingly vulnerable to shocks, putting essential goods such as food, medical supplies and energy resources at risk.

• End of human dominance. Technological advances in AI and calls for eco-democracy could change power dynamics, affecting human agency and raising ethical and governance challenges.

• Erosion of democracy. Declining trust in institutions, increasing polarisation and foreign interference pose risks to democratic governance and social cohesion.

• Failure of the green transition. The path to climate neutrality is complicated by dependence on critical commodities and political challenges that could slow progress on environmental goals.

• Lawless society. Cybercrime, economic inequality and growing social unrest could weaken the rule of law and increase crime rates in all regions.

• Social division. Economic disparities, unequal access to technology and demographic changes could exacerbate social divisions and challenge social cohesion within the EU.

• Weakened EU influence. The EU's unity and global standing are threatened by internal divisions and external pressures, affecting its ability to act effectively.

In-Depth Look at Key Risks

The JRC report is well structured and provides a wealth of information on the emerging trends and the ten risk clusters. Delving a little deeper into some of them may serve as an appetizer to reading the full report.

Failure of the green transition. While the EU has set ambitious climate targets, there are significant risks of failing to achieve a successful green transition. Without effective mitigation, climate change is likely to increase the frequency and severity of environmental disasters, including extreme weather events such as forest fires, floods and water scarcity, particularly in southern Europe.

A significant factor in this risk is the EU's dependence on critical raw materials for green technologies, such as batteries and solar panels, making it reliant on imports, mainly from non-EU countries. This dependence poses a risk if international supply chains are disrupted, potentially stalling the deployment of green technologies. Further complications arise from the changing geopolitical landscape, with other global regions rapidly advancing in green technology manufacturing. This competitive environment could affect the EU's position as a climate leader if its investment in green infrastructure does not keep pace. In addition, some EU regions may struggle to secure adequate funding or resources for the green transition, leading to inequalities in climate resilience and economic adaptation across the Union. The report suggests that to mitigate these risks, the EU must not only secure alternative sources of materials, but also increase investment in green infrastructure in all Member States.

Disrupted critical supply chains. Modern supply chains are critical but highly vulnerable structures, increasingly stressed by global shocks. The JRC report shows how interdependencies and limited resilience make supply chains vulnerable to disruption. Examples include the impact of the COVID-19 pandemic and geopolitical conflicts, such as Russia's war on Ukraine, which have disrupted access to essential goods such as food, medicines and critical raw materials. This disruption is particularly risky in the EU, which relies heavily on imports of materials critical to sectors such as technology and energy.

While digitalisation increases connectivity, it also introduces cybersecurity risks that threaten critical infrastructure. Cyber-attacks on energy, health and transport systems could lead to cascading failures, affecting citizens' access to essential services. In addition, a growing dependence on a narrow range of countries for essential materials, such as lithium for batteries, puts the EU in a vulnerable position if diplomatic or trade relations falter. To address these risks, the report suggests a focus on local resilience, increased investment in the circular economy and diversification of supply chains, which would reduce dependence on single sources and increase adaptability in the face of future crises.

Declining wellbeing. Today's complex wellbeing landscape combines physical health concerns with escalating psychological and social stressors. A significant factor is the 'infodemic' - the overwhelming influx of information that has accompanied increased digitalisation. While access to information can promote inclusiveness, overload can be detrimental to mental health, leading to stress and anxiety. Social media plays a significant role in this, creating echo chambers that exacerbate fragmentation and niche thinking.

The rise of niche communication channels can create social echo chambers where individuals' beliefs are reinforced without exposure to broader perspectives, leading to a fragmented society. This fragmentation threatens the social fabric by isolating groups and fuelling divisions, which in turn increases feelings of discrimination and reduces social cohesion. In parallel, physical health risks from pollution, unhealthy lifestyles, synthetic food, new disease and potential pandemics further threaten wellbeing. The report highlights the importance of reorienting societal measures of success beyond GDP to include more comprehensive measures of health and wellbeing that ensure sustainability and social trust.

Erosion of democracy. The report identifies a worrying trend of declining trust in political institutions and processes, exacerbated by polarisation, disinformation and disengagement among younger generations. As divisions between social groups deepen, it becomes more difficult to reach consensus on key issues, which in turn destabilises democratic structures. A particular area of concern is the manipulation of public opinion through technology. Social media platforms and targeted algorithms enable the spread of misinformation, which can sway public opinion and even elections, as seen in events such as Brexit. Foreign interference also poses a threat, weakening the integrity of democratic processes.

Generational divides contribute to this erosion, with younger people increasingly disengaged from traditional political processes. The risk is that political systems fail to adequately represent different perspectives, leading to disillusionment and even the rise of authoritarian sentiments. The JRC report highlights the need for policies that protect democratic institutions and promote transparency, and proposes dynamic, participatory models of governance that involve citizens more directly in policy making. Such approaches could help rebuild trust, foster a more engaged electorate and strengthen the resilience of democratic structures against these emerging threats.

Social divisions. The JRC report highlights social division as a significant risk, driven by deepening inequalities across multiple dimensions, including economic status, gender, ethnicity, education and geographical location. Economic growth has often disproportionately benefited wealthier segments of society, leaving vulnerable groups with limited access to opportunities. This polarisation risks undermining social cohesion, which the report identifies as essential for societal stability and wellbeing. Technological advances and digitalisation are also exacerbating this divide. For example, as life increasingly moves online, groups without access to fast internet or the necessary digital skills - such as rural communities and older people - face greater isolation. Tailored information channels can also create echo chambers, reinforcing niche thinking and isolating groups within their own perspectives. This fragmentation of viewpoints can prevent mutual understanding and hinder societal consensus on critical issues. The report warns of potential consequences, including the rise of extremist ideologies and the erosion of democratic processes. New technologies, if misused, could manipulate public opinion, amplify divisive narratives and deepen divisions within society. To counter these risks, the report suggests that policies should aim to promote inclusivity, strengthen social cohesion and bridge the digital divide across the EU.

Territorial Diversity and Risk Implications

The identified risks have different territorial impacts across the EU and pose different challenges to EU territorial cohesion. For example, climate-related risks such as water scarcity and increased forest fires are expected to disproportionately affect the southern regions of Europe, which are already experiencing a warmer climate and are more vulnerable to environmental stress. Such an uneven distribution of risks underlines the importance of regionally tailored resilience strategies to ensure that all territories can adequately respond to climate impacts and maintain cohesion.

Economic risks, particularly those related to disrupted supply chains and economic inequalities, may also manifest themselves differently across regions. For example, areas heavily dependent on specific industries or with limited digital infrastructure may face more severe economic setbacks if global supply chains are strained. Similarly, risks of social division linked to digital and economic inequalities could further entrench regional disparities, especially where access to digital resources or economic opportunities is limited.

These territorial challenges call for EU policies that not only mitigate risks, but also strengthen territorial cohesion by addressing the specific vulnerabilities of each region. Strategies such as investing in regional digital infrastructure, supporting the circular economy and promoting local resilience measures are essential to build a cohesive EU that can withstand diverse and region-specific impacts.

This territorial perspective highlights the need for a place-based policy approach that takes into account regional diversity within the broader EU resilience and cohesion framework. This also requires more insight into the territorial implications of future trends and risks, e.g. by enriching sectoral risk analysis with territorial foresight processes. 

Overall, there is a need for a proactive and anticipatory policy approach to future risks and potentials. The JRC report highlights the importance of strategic foresight - and we would add strategic territorial foresight - in navigating the future risk landscape. By addressing interlinked risks and recognising regional diversity, the EU can better equip itself to turn these challenges into opportunities for resilience, cohesion and sustainable growth.  

by Kai Böhme