kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer

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KOM (2020) 0493 Bilag 1
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kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Table of Contents

EXECUTIVE SUMMARY ...........................................................................................................................................2

EMBEDDING STRATEGIC FORESIGHT INTO EU POLICYMAKING .............................................4

RESILIENCE AS A NEW COMPASS FOR EU POLICIES ..................................................................5

A FOUR-DIMENSIONAL ANALYSIS OF RESILIENCE ......................................................................8

3.1. The social and economic dimension ......................................................................................8

3.2. The geopolitical dimension ...................................................................................................... 14

3.3. The green dimension .................................................................................................................. 22

3.4. The digital dimension ................................................................................................................. 29

4. STRATEGIC FORESIGHT AGENDA ............................................................................................................. 35

4.1 Monitoring resilience ....................................................................................................................... 35

4.1.1 Prototype resilience dashboards .............................................................................. 35

4.1.2 Work ahead for monitoring resilience ................................................................... 38

4.2 Horizontal foresight activities to foster effective EU transition-led policies ..... 39

4.3 Thematic strategic foresight agenda ...................................................................................... 40

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Executive Summary

President von der Leyen’s political guidelines set a strategic long-term

direction

to achieve the transition towards a green, digital and fair Europe

. They lay out a

path for Europe to become the first climate-neutral continent by 2050, to be fit for the digital

age, and to cultivate its unique social market economy and democratic order.

The COVID-19 crisis has shocked the world, both exposing vulnerabilities and

highlighting capacities within the EU.

The pandemic has already claimed the lives of

almost a million people globally and has led to economic, social and psychological hardship.

In the EU, it has exacerbated social and economic inequalities: in 2020, despite various safety

nets, unemployment is projected to rise to more than 9% and real disposable income to drop

by 1%, disproportionately affecting women and poorer households

. The EU’s strongly

diversified trade has proven to be a strength, even if reliance on a limited number of non-

EU suppliers for some critical goods and services has been exposed as a vulnerability. The

EU and its Member States were also able to rely on their social market economies,

sustainable ecosystems, robust financial systems and an effective governance framework.

The recovery plan for Europe

now shows the way forward:

Next Generation EU aims to

build

a more resilient, sustainable, and fair Europe

through large-scale financial support for

investment and reforms.

Strategic foresight will play a key role in helping future-proof EU policymaking by

ensuring that short-term initiatives are grounded in a longer term perspective.

make the most of its potential, this Commission has a strong mandate to put

strategic

foresight

at the heart of EU policymaking

. Strategic foresight can help build collective

intelligence in a structured manner to better chart the way forward for the twin green and

digital transitions and to recover from disruptions. With this Communication, the Commission

sets out how it will integrate strategic foresight in EU policymaking and outlines related

priorities. This is vital, as we are entering a new era, where action-oriented foresight will

stimulate strategic thinking and shape EU policies and initiatives, including future

Commission work programmes.

The central theme of this first report is resilience, which has become a new

compass for EU policies with the COVID-19 crisis.

Resilience

is the ability not only to

withstand and cope with challenges but also to undergo transitions in a sustainable, fair, and

democratic manner.

Resilience is necessary in all policy areas to undergo the green and

digital transitions, while maintaining the EU’s core purpose and integrity in a dynamic and at

times turbulent environment.

A more resilient Europe will

recover faster, emerge stronger

from current and future crises, and

better implement the United Nations’

Sustainable

Development Goals.

A Union that strives for more. Political Guidelines for the next European Commission 2019-2024.

European Commission, European Economic Forecast. Spring 2020.

COM(2020)456 final, Europe's moment: Repair and Prepare for the Next Generation.

https://ec.europa.eu/commission/sites/beta-political/files/mission-letter-maros-sefcovic-2019_en.pdf

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

This first annual Strategic Foresight Report outlines how foresight will inform

policies with a view to strengthening

the EU’s resilience in four interrelated

dimensions: social and economic, geopolitical, green, and digital.

It analyses the

EU’s

resilience in response to the COVID-19 crisis in the context of the acceleration or deceleration

of relevant

megatrends,

long-term driving forces that will likely have a large influence on

the future. This Communication shows how policies to improve resilience, by mitigating

vulnerabilities and strengthening capacities, can open new opportunities in each of the four

dimensions. This includes reconsidering the future of wellbeing, work, labour markets and

skills, reconfiguring global value chains, supporting democracy, reforming our rules-based

trading system, building alliances in emerging technologies, and investing in the green and

digital transitions.

This new focus on resilience calls for close monitoring.

This Communication proposes

to move towards

resilience dashboards,

which, once fully developed in cooperation with the

Member States and other key stakeholders, should be used for assessing the vulnerabilities

and capacities of the EU and its Member States in each of the four dimensions. Such analysis

can help answer the question: are we, through our policies and recovery strategy, effectively

making the EU more resilient?

The strategic foresight agenda will encompass horizontal foresight activities and

thematic forward-looking exercises.

For the upcoming year, these include: open strategic

autonomy, the future of jobs and skills for and in the green transition, and deepening the

twinning of the digital and green transitions. This agenda will bring a dynamic perspective

of synergies and trade-offs among EU policy goals, thereby supporting the coherence of EU

policies.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Embedding strategic foresight into EU

policymaking

The Commission has made use of foresight for many years, but now aims to

mainstream it into policymaking in all fields.

Foresight

–

the discipline of exploring,

anticipating and shaping the future

–

helps build and use collective intelligence in a

structured and systematic way to anticipate developments and better prepare for change.

Horizon scanning

the

assessment of

megatrends, emerging issues and their policy

implications, as well as the exploration of alternative futures

via visioning and scenario

planning, are key to informing strategic political choices.

Strategic foresight in support of EU

policymaking was first developed under

President Delors’

Cellule de Prospective.

Together

with long-term modelling

, it has since informed many policies, including climate action. To

support its long-term ambition of a climate-neutral continent fit for the digital age, the von

der Leyen Commission aims to mainstream strategic foresight into the preparation of major

initiatives. This process is already under way

–

for instance, the recently adopted

Communication on Critical Raw Materials makes significant use of foresight

Over the

coming years,

establishing a forward-looking culture in policymaking will be crucial for the

EU to strengthen its capacity to deal with an increasingly volatile and complex world

and to

implement its forward-looking political agenda. It will ensure that short-term actions are

grounded in long-term objectives and will allow the EU to lead the way in charting its own

course and shaping the world around it.

Strategic foresight should inform major policy initiatives.

As such, it will become an

integral part of the Commission’s Better Regulation toolbox, for example in

ex ante

impact

assessments. This will ensure that EU policies draw on a clear understanding of possible

future trends, scenarios and challenges, especially in policy areas subject to rapid structural

change. Strategic foresight will also support the regulatory fitness and performance

programme

, which identifies opportunities to reduce Europe’s regulatory burden

and helps

assess whether existing EU laws remain ‘fit for the future’

A regular stream of strategic foresight activities will support EU policymaking.

The

annual Strategic Foresight Reports will contribute to an inclusive reflection on questions of

Strategic foresight

draws useful insights for strategic planning, policymaking and preparedness, (European Commission, 2017,

Strategic

Foresight Primer).

It is not about predicting the future but about exploring different plausible futures that could arise and the opportunities

and challenges they could present. It involves identifying trends and emerging issues, using them to create visions and associated pathways

to make better decisions and act in the present in order to shape the future we want.

(https://www.sciencedirect.com/book/9780128225967/science-for-policy-handbook).

Horizon scanning

is part of trend analysis and is typically used to add context in foresight activities. It can act as a forum to review and

share information about future developments, provide orientation, identify opportunities and serve as an early warning system.

Modelling uses historical data as inputs to make informed estimates on the direction of future trends. Strategic foresight and modelling

are complementary approaches for anticipatory- and evidence-based policy making.

European Commission, 2020, Critical Raw Materials for strategic technologies and sectors

–

a foresight study (doi: 10.2873/58081),

accompanying COM(2020)474 final, Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability.

https://www.routledge.com/Transforming-the-Future-Open-Access-Anticipation-in-the-21st-Century/Miller/p/book/9781138485877.

https://ec.europa.eu/info/law/law-making-process/evaluating-and-improving-existing-laws/refit-making-eu-law-simpler-and-less-costly.

Foresight can for instance, help apply the innovation principle when designing and reviewing European laws

(https://ec.europa.eu/info/news/innovation-principle-makes-eu-laws-smarter-and-future-oriented-experts-say-2019-nov-25_en).

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

strategic

importance for Europe’s future, analysing key trends, defining topics of critical

interest for the EU and exploring ways to pursue our aspirations (Section 4). The preparation

of future reports will be based on

full foresight cycles

, including in-depth and participatory

foresight exercises on major initiatives, and will aim to feed into the annual State of the

Union address, Commission work programmes, and multiannual programming exercises.

Building on in-house resources

, external expertise

and cooperation with Member States,

other key stakeholders and citizens, the

Commission will expand its strategic foresight

capacities to assess risks and opportunities, aid early warning and situational awareness

and explore alternative futures.

Strategic foresight will foster participatory and forward-looking governance in

Europe and beyond.

The Commission will build close foresight cooperation and alliances

with other EU institutions, notably in the context of the European Strategy and Policy Analysis

System (ESPAS)

reaching out to international partners

and

launching an EU-wide foresight

network to develop partnerships that draw on Member States’ public foresight capabilities,

think tanks, academia and civil society. Embedding foresight in EU policymaking needs to

happen in an iterative and systematic way, building on approaches that have already proven

effective. It will help develop a shared vision of policymaking at the highest political level,

while allowing for the upscaling of best practices and keeping the door open to

experimentation.

Resilience as a new compass for EU Policies

The COVID-19 crisis has exposed a number of vulnerabilities in the EU and its

Member States.

An analysis of the impacts of the crisis, beyond its terrible human toll,

reveals

severe disruptions across Europe’s economy and society. Preparedness and

prevention, early warning systems and coordination structures were clearly under strain, thus

underlining the need for more ambitious crisis management for large-scale emergencies at

EU level. In the first months of the pandemic, many hospitals were overwhelmed, free

movement of people and goods was severely restrained and essential medicines and

equipment were in short supply. The need to treat COVID-19 patients affected the capacity

of the system to deal with non-COVID-19 patients, while residential care facilities and

essential support services for older people and persons with disabilities were particularly

challenged. Schools and universities were forced to close, many ill-prepared to offer digital

learning alternatives to classrooms, particularly to children from disadvantaged backgrounds

foresight cycle

can take up to one year to complete and covers: a diagnosis of how past developments have led to the current situation,

the likely future evolution based on trends and emerging issues if no action is taken, and alternative future possibilities; collective visions;

alternative roadmaps and a timetable for their implementation; the selection of pathways and associated strategies, actions and

partnerships; and the definition of adequate monitoring indicators, so that actions can be adapted along the way. The

external dimension

of foresight cycles includes engaging systematically in strategic discussions with Member States, European institutions, citizens, civil society

and key stakeholders. The

internal dimension

includes the mainstreaming of strategic foresight into policy- and decision-making, through

methods such as impact assessments, alternative scenario planning and testing and information sharing to build collective intelligence.

The Commission’s foresight capacities include the Joint Research Centre’s

Competence Centre on Foresight

and the Commission’s

strategic foresight network, coordinated by the Secretariat-General.

Situational awareness is the part of decision-making aimed to perceive environmental elements and events with respect to time or

space, to understand what they mean, and to projection their future status.

https://espas.secure.europarl.europa.eu/orbis/espas2018about.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

or those with a disability. Overall, confinement measures have had a much more severe

effect on the economy than the 2008 financial crisis.

After an uneasy start, the EU and its Member States pulled together to deal with

the crisis.

Agility and leadership at all levels of government played a key role in our

response. Initial knee-jerk competition for scarce medical resources and unilateral actions by

Member States in the single market and Schengen Area quickly evolved into improved

cooperation and coordination, facilitated by the Commission. The EU devised innovative

solutions and demonstrated its resilience capacities. EU manufacturers and 3D printing

companies

swiftly adapted their production lines to produce facemasks, ventilators and

hand sanitiser

. The Commission established the first-ever common strategic reserve of

medical equipment as part of rescEU and helped facilitate more than 350 flights to bring

stranded EU citizens back home. After initial border restrictions resulting in supply

bottlenecks, the Commission implemented and coordinated the green lanes allowing freight

transport to move unhindered18. Distance learning was established to compensate for

closed schools and universities. Companies and administrations shifted to teleworking where

possible. Consumers turned to e-commerce and home deliveries. Member States put in place

safety nets to protect firms and workers during the confinement measures. Between April

and May 2020, the Commission adopted a safety net package

and issued country-specific

recommendations under the European Semester

that applied maximum flexibility to

accommodate this extraordinary situation. It also put forward a coordinated strategy to lift

confinement measures and a comprehensive recovery plan

. Therefore, the pandemic has

also underlined Europe’s capacity to act in the face of adversity.

Resilience refers to the

ability

not only to withstand and cope with challenges but

also to transform in a sustainable, fair, and democratic manner

. In light of the

COVID-19 crisis and of the transition-led political agenda, it is clear that Europe needs to

further strengthen its resilience and bounce forward, i.e. not only recover but emerge

stronger by intensifying these transitions. The EU needs to draw lessons from the pandemic,

anticipate future developments, and strike the right balance between the wellbeing of current

and future generations

The EU’s vulnerabilities

and resilience capacities are analysed in the light of

relevant megatrends,

long-term driving forces that will most likely have a significant

influence on the future. Fourteen global megatrends have been identified by the

Formlabs produced 150 000 swabs with 250 printers each day. Similarly, Paris hospital workers scanned valves, syringe pumps and

medical plug connections and produced medical material with 60 3D printers to avoid shortages.

https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/coronavirus-european-solidarity-

action_en#euindustrystepsintoprotecteuropeancitizens

C(2020)1897 final, Communication from the Commission on the implementation of the Green Lanes under the Guidelines for border

management measures to protect health and ensure the availability of goods and essential service.

https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/overview-commissions-response_en#economic-measures

https://ec.europa.eu/info/publications/2020-european-semester-country-specific-recommendations-commission-recommendations_en

COM(2020)456 final, Europe's moment: Repair and Prepare for the Next Generation.

Manca, A.R., Benczur, P., and Giovannini, E., 2017,

Building a scientific narrative towards a more resilient EU society.

Giovannini, E., Benczur, P., Campolongo, F., Cariboni, J., Manca, A.R, 2020.

Time for transformative resilience: the COVID-19 emergency,

Publications Office of the European Union, Luxembourg.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Commission’s

Megatrends Hub

. Section 3 provides a preliminary systematic analysis of the

vulnerabilities and capacities revealed by the crisis in the EU and its Member States, in light

of the possible acceleration or slowing down of these megatrends due to the crisis, as

depicted in

Figure 2.1.

For instance, COVID-19 has deepened inequalities, as well as

accelerated hyperconnectivity and demographic imbalances. The analysis also identifies

major opportunities to strengthen Europe’s resilience through relevant policy action.

Figure 2.1

–

Potential impact of COVID-19 on megatrends

Forward-looking

policies supported by foresight will strengthen the EU’s resilience.

Foresight can help anticipate developments likely to have adverse impacts, to strengthen

resilience through structural changes

Figure 2.2

shows one cycle of how strategic

foresight can inform resilience-enhancing policies across the social and economic,

geopolitical, green, and digital dimensions, taking into account the impact of the crisis on

relevant megatrends. Policies benefitting from strategic foresight can better mitigate the

vulnerabilities and strengthen the capacities revealed by the crisis, opening new

opportunities and making Europe more resilient. This is a continuous process, with constant

re-evaluation and feedback loops.

These long-term

driving forces are identified and monitored by the Commission’s Joint Research Centre (JRC). They are continually

reviewed by JRC experts to include updates and accommodate associated trends of relevance or interest for the EU Commission Services.

The definitions of the 14 megatrends are available at:

https://ec.europa.eu/knowledge4policy/foresight/tool/megatrends-hub_en.

See also

the ESPAS Report 2019: Global Trends to 2030 (https://ec.europa.eu/knowledge4policy/publication/espas-report-2019-global-trends-

2030_en).

European Parliamentary Research Service, 2020, Towards a more resilient Europe post-coronavirus. An initial mapping of structural risks

facing the EU.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Figure 2.2

–

Link between strategic foresight and resilience

A Four-Dimensional Analysis of Resilience

3.1. The social and economic dimension

The social and economic dimension of resilience refers to the ability to tackle

economic shocks and achieve long-term structural change in a fair and inclusive

way.

It means building the social and economic conditions for a recovery geared towards

the transitions, promoting social and regional cohesion, and supporting the most vulnerable

in society, while taking into account demographic trends, and in line with the European Pillar

of Social Rights.

Capacities

Europe’s social and economic resilience rests on its population and its unique social

market economy.

It combines a highly skilled workforce and competitive economy with

social systems that aim to protect people from adverse events and help them cope with

change. Through social dialogue, social partners contribute to sustainable and inclusive

growth. People across the EU have guaranteed access to education and social protection

measures, such as sickness and unemployment benefits, family leave and flexible work

arrangements. Although put under stress, this model played a key role in cushioning the

effects of the crisis, for instance by safeguarding jobs and keeping companies afloat

. Some

Member States have been hit harder by the crisis, mainly due to their different economic

structures and fiscal space. Member States with higher levels of public debt might generally

be more constrained in cushioning the impact of the crisis. However, national measures were

complemented by those at EU level, in particular the three major safety nets for workers,

https://esip.eu/new/details/2/82-COVID-19%20?social_security=

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

businesses and government, worth €540 billion, which were endorsed in April 2020 by the

European Council

. Looking to the future, the EU’s strong public education system

helps

deliver the skills needed to prepare for the jobs of tomorrow, a key element in ensuring a

just transition towards the green and digital economy.

Europe can also rely on the strength of its single market

. The single market improves

mobility, ensures that innovative business models can flourish, making it easier for retailers

to do business across borders, and enhances access to goods and services throughout the

EU. Transport infrastructure, the single currency and diversified economic sectors are

amongst the key enablers of the economic resilience. Across the single market, economic,

regional and social diversity equips the Union with an unparalleled competitive advantage

on a global scale and underpins its collective resilience.

Europe’s strong trade and investment links will help get the economy back on

track.

With 85% of the world’s future growth projected to occur outside of the EU and with

35 million European jobs depending on exports and 16 million on foreign investment, trade

and investment will be key to connect Europe to external sources of growth. This is especially

true as demand is likely to pick up asymmetrically after the crisis.

The EU’s financial system has drawn

important lessons from the 2008 financial

crisis.

It proved resilient in the early days of the pandemic, thanks in part to the EU financial

reform agenda, in particular the creation of the Banking Union.

It is now far more robust,

with banks better capitalised to focus on lending to households and companies than in

2008

Opportunities for businesses to raise financing on capital markets have improved as

well.

Collaborative and non-profit organisations strengthen social and economic

resilience.

Cooperatives, mutual societies, non-profit associations, foundations and social

enterprises have helped public services cope with the crisis

. They have demonstrated their

ability to provide a wide range of products and services across the single market in

circumstances where for-profit companies would not have been able to generate adequate

returns on capital, thus creating and preserving millions of jobs

. They are also a crucial

engine for social innovation.

European solidarity is key to overcoming collective challenges like COVID-19.

Cohesion policy and the EU Solidarity Fund play a key role in the Coronavirus Response

https://ec.europa.eu/newsroom/ecfin/item-

detail.cfm?item_id=675083&utm_source=ecfin_newsroom&utm_medium=Website&utm_campaign=ecfin&utm_content=EU%20leaders

%20approve%20%20billion%20package%20of%20safety%20nets%20and%20task%20Commission%20&lang=en.

The EU Single Market accounts for 450 million consumers and 22.5 million small and medium-sized enterprises (SMEs).

Euro area banking sector resilient to stress caused by coronavirus, ECB analysis shows:

https://www.bankingsupervision.europa.eu/press/pr/date/2020/html/ssm.pr200728~7df9502348.en.html.

In COVID-19 crisis, for example, organisations such as

SOS Médecins

in France were alleviating the pressure on the health service and

hospitals by providing doctor home visits for persons who needed it. In the UK over 30% of home nursing were provided by social

enterprises

(http://www.oecd.org/coronavirus/policy-responses/social-economy-and-the-covid-19-crisis-current-and-future-roles-

f904b89f/#:~:text=The%20COVID%2D19%20crisis%20has%20allowed%20the%20social%20economy%20to,to%20provide%20goods

%20and%20services).

There are two million social economy enterprises in Europe, representing 10% of all businesses in the EU. More than 11 million people,

about 6% of EU’s employees, work for social economy enterprises:

https://ec.europa.eu/growth/sectors/social-economy_en.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Investment Initiative, helping exposed sectors like healthcare, SMEs, and labour markets in

the most affected Member States and regions

. The Emergency Support Instrument

–

financing arm of the Joint European Roadmap towards lifting COVID-19 confinement

measures

–

allows mitigating the consequences of the pandemic in a coordinated manner

at EU level

Vulnerabilities

The crisis exposed health and social vulnerabilities in Europe.

Residential care

facilities and support services for older people and persons with disabilities were structurally

vulnerable and unprepared to cope with and control the spread of the coronavirus. Those

with chronic diseases, especially with weak immune systems or respiratory problems, have

been especially affected. Health systems in several Member States, as well as the

pharmaceutical industry, were not fully prepared, experiencing problems including shortages

of personal protective equipment and chemicals required for the production of

pharmaceuticals. Notably, Europe struggled to prepare and coordinate when the first

warnings began to emerge from China. There is a need to better anticipate health risks and

prevent the spread of new infectious diseases and associated disorders. COVID-19 has

shifted attention away from major health challenges like non-communicable diseases,

notably cancer and obesity.

Confinement measures have affected overall wellbeing.

Together with life

satisfaction, it has dropped to its lowest level in over 40 years

. In the first 6 months of

2020, the feeling of loneliness in Europe almost tripled, especially among young and older

people, and mental health challenges increased

Economic, gender, skills, regional, and ethnic inequalities have all worsened

COVID-19 increased the number of people in, or at risk of, poverty in Europe

. Some of those

economically impacted by the pandemic were also impaired in accessing food

. Racial and

ethnic minorities are statistically more at risk of contracting the virus and of facing financial

insecurity

. Unequal access to digital infrastructure and services was also exposed by the

crisis, widening the digital divide. Students from disadvantaged backgrounds were less likely

to benefit from online learning, and lower skilled workers were more likely to be employed

in ‘contact jobs’, risking greater exposure to the disease whilst having lower access to

healthcare. (Tele-) working parents, and especially mothers, faced extra burdens with no

In April 2020, the Commission launched two packages of measures to mobilise support against COVID-19: the

Coronavirus Response

Investment Initiative

(CRII) and the

Coronavirus Response Investment Initiative Plus

(CRII+),

which were swiftly endorsed by the European

Parliament and the European Council.

https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/emergency-support-instrument_en.

https://www.mckinsey.com/featured-insights/europe/well-being-in-europe-addressing-the-high-cost-of-covid-19-on-life-satisfaction#

The megatrend ‘shifting health challenges’ (https://ec.europa.eu/knowledge4policy/shifting-health-challenges_en)

has accelerated.

The megatrend ‘diversifying inequalities’ (https://ec.europa.eu/knowledge4policy/diversifying-inequalities_en)

has accelerated.

Using the

assumptions of the Commission Spring 2020 Economic Forecast, the ‘at risk of poverty’ rate is expected to increase by 4.8

percentage points. The extra policies that Member States have introduced during the crisis can mitigate this increase (to 1.7 percentage

points). Almeida, V., Barrios, S., Christl, M., De-Poli, S., Tumino, A., van der Wielen, W., 2020,

Households’ income and the cushioning effect

of fiscal policy measures in the Great Lockdown. JRC Working Papers on Taxation and Structural Reforms No 06/2020, European

Commission, Joint Research Centre, Seville. JRC121598. Similar findings have been presented in

https://voxeu.org/article/inequality-and-

poverty-effects-lockdown-europe.

Foodbanks witnessed an exponential increase in demand worldwide (http://www.fao.org/food-loss-reduction/news/detail/en/c/1271024/).

https://www.enar-eu.org/Evidence-of-the-impact-of-Covid-19-on-racialised-communities-exposes-need-to.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

access to childcare. Front-line workers consisted of a disproportionate number of women,

who represent 70% of all health and social services staff. Domestic violence rose

significantly

. In addition, the crisis highlighted the social and economic vulnerability of

extra-EU workers

, as well as their crucial contribution to Europe's coronavirus response

Economic hardship and recession may also lead to higher exposure to organised crime and

a rise in corruption

Economic sectors and firms have been hit hard by the crisis.

In the second quarter of

2020, still marked by COVID-19 confinement measures in most Member States, seasonally

adjusted GDP decreased by 12.1% in the euro area and by 11.7% in the EU compared with

the previous quarter

. Cumulative net revenue losses of EU companies are estimated in the

range of 13-24% of EU GDP

A fragile corporate sector can lead to company failures, which

can cause lasting economic damage by increasing unemployment, wasting capital, and

destroying the equity of its owners. Business failures also disrupt economic networks and bring

international supply chains to a halt. Even for companies that survive, their capacity to invest

will shrink.

The crisis has also further aggravated payment delays in business transactions

For small businesses, late payments can make the difference between survival and

bankruptcy, and compromise their ability to pay employees and suppliers, operate, produce

and grow. Given the limited resources and existing obstacles in accessing capital, SMEs may

have less resilience and flexibility in dealing with the costs associated with shocks such as

COVID-19

. Public administrations were put under severe strain to provide services to firms

and citizens.

Labour markets have been disrupted

, with massive job losses that could have

cascading long-term effects.

Member States’ capacities differ when it comes to financing

safety nets for people and firms to absorb the impact of the crisis, with the ensuing

asymmetries threatening regional and social cohesion. Unlike in previous crises, employment

was hardest hit in the service sector, the engine of job creation over the last decade

. Almost

8% of all jobs in Europe, equivalent to 12 million full-time jobs, are forecast to be lost in

2020

, without counting the devastating effect on atypical forms of labour and project-

based work. This increases the risk of structural and long-term unemployment, resulting in

Affecting particularly women, children and LGBTI+ communities (https://unric.org/en/who-warns-of-surge-of-domestic-violence-as-

covid-19-cases-decrease-in-europe/).

https://publications.jrc.ec.europa.eu/repository/handle/JRC120730.

https://ec.europa.eu/knowledge4policy/sites/know4pol/files/key_workers_covid_0423.pdf.

https://eucrim.eu/news/europol-how-covid-19-shapes-serious-and-organised-crime-landscape-eu/.

https://ec.europa.eu/eurostat/documents/2995521/11156775/2-31072020-BP-EN.pdf/cbe7522c-ebfa-ef08-be60-b1c9d1bd385b.

https://voxeu.org/article/eu-firms-post-covid-19-environment.

In March 2020, payment delays in commercial transactions in France tripled compared to the same period in 2019. In Spain, 70% of

SMEs declared to have payment terms unilaterally extended by their debtors. In Italy, payment delays to SMEs in the first quarter of 2020

were estimated at more than

€15 billion.

http://www.oecd.org/coronavirus/policy-responses/coronavirus-covid-19-sme-policy-responses-04440101/.

COM(2020)112 final, Coordinated economic response to the COVID-19 outbreak.

Hospitality, air travel, tourism and culture were hit particularly hard. Some areas like delivery and healthcare saw an increase in jobs,

but these were mainly precarious. Cancelled cultural performances, shut down venues, halted productions, and the related impact on

income, have made the situation of the cultural and creative sector more precarious than ever before. The media sector, playing a key role

for democracy, has also been heavily impacted. Commission estimates of May 2020 foresaw a drop in turnover of over 50% in 2020,

without taking into account further confinement periods. See: SWD(2020)98 final, Identifying Europe's recovery needs; Eurofound, 2020,

COVID-19: Policy responses across Europe, Publications Office of the European Union, Luxembourg.

https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_740893/lang--en/index.htm.

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a deskilling of the labour force at precisely the moment when digital and other specialist

skills are key for future employment and 2 out of 5 Europeans lack digital literacy

. Young

people entering the workforce at this time will also find it harder to secure their first job

Moreover, the pandemic hit when 21% of people living in the EU were already at risk of over-

indebtedness

The Banking Union has been crucial to weathering the storm in the short term, but

the Economic and Monetary Union remains incomplete.

We see more than ever the

long-term importance of a Capital Markets Union, at a time when the role of market finance

for the real economy is indispensable. While opportunities for market finance of businesses

have improved in general, measures to facilitate access to equity finance would make them

more resilient. To build a sustainable future, the EU thus needs a more resilient financial

market infrastructure, with deep and wide capital markets that can be leveraged in a world

of strategic competition.

COVID-19

is likely to contribute to the ongoing trend of Europe’s shrinking

population.

Demographers

expect even lower birth rates in Europe due to the uncertainty

caused by the pandemic and ensuing recession

. As Europe’s population is ageing, older

people and persons with disabilities are also most prone to poverty and COVID-19

, and are

the most socially isolated by distancing measures

. Furthermore, demographic trends

impact social and economic resilience as a whole.

Opportunities

Private and public investments are key to social and economic resilience and

recovery.

They must be

in line with the EU’s policy goals of inclusiveness, digitalisation,

decarbonisation and sustainability, and foresight will be instrumental in developing a

perspective that will ensure these conditions are met. The 2021-2027 multiannual financial

framework and Next Generation EU will foster substantial investment, innovation and

economic convergence between Member States,

with safeguards for the rule of law. It

will

also ensure the good functioning of the single market. The Recovery and Resilience Facility

(RRF) will foster social and economic resilience through the support of packages of

investment and reforms.

Funding for companies, especially SMEs, needs to meet their present needs and

those brought about by long-term transitions.

Action to strengthen the banking sector,

capital markets and equity financing, including fostering the Capital Markets Union and

completing the Banking Union, will be important in bolstering the EU’s resilience. Workers

will benefit from such reforms, increasing the ability of firms to secure and create jobs.

Digital Economy and Society Index 2020 (https://ec.europa.eu/digital-single-market/en/desi).

European Commission 2020 Spring Economic Forecast.

Eurofound, 2020, Addressing household over-indebtedness, Publications Office of the European Union, Luxembourg.

The megatrend ‘increasing demographic imbalances’

(https://ec.europa.eu/knowledge4policy/increasing-demographic-imbalances_en)

has accelerated.

https://population-europe.eu/policy-brief/demography-and-coronavirus-pandemic.

https://ec.europa.eu/info/sites/info/files/demography_report_2020_n.pdf.

https://www.un.org/en/development/desa/policy/wess/wess_dev_issues/dsp_policy_01.pdf

and

https://www.brookings.edu/blog/future-development/2020/05/18/which-jobs-are-most-at-risk-because-of-covid-19/.

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Adapting social protection systems to labour markets marked by the movement of workers

between professions and countries will be important for preserving employment. Investment

in human capital and innovation, well-functioning institutions and an attractive business

environment are key.

COVID-19 has produced rapid shifts in labour markets.

Changes predicted to happen

over decades, such as entire organisations, national administrations, and companies

teleworking, or virtual conferences and events replacing face-to-face gatherings

, have

taken place in weeks due to the pandemic

. While a part of this shift is likely to be temporary,

it will open the door to new employment opportunities and strengthen integration of the

European labour market. It also presents an opportunity to rethink and adapt forms of

employment and career models.

Schools and universities had to go virtual almost overnight, presenting new

opportunities for delivering education and learning

. Hyperconnectivity and cross-

border cooperation between education institutions, new pedagogical approaches and delivery

modes (e.g. virtual or blended), advancements in cognitive sciences, information availability

and greater emphasis on lifelong learning are all contributing to changes in learning models

and access to education.

Disruption of established lifestyles has intensified the debate on how we measure

progress and conceive ‘wellbeing’.

As stressed in the 2020 annual sustainable growth

strategy

, economic growth is not an end in itself. In December 2019, the Commission

presented the

European Green Deal,

the new EU growth strategy that aims to transform the

Union into a modern, resource-efficient and competitive economy where climate and

environmental challenges are turned into opportunities. The crisis has reignited the debate

on what kind of economic growth is desirable, what actually matters for human wellbeing in

a world of finite resources and on the need for new metrics to measure progress beyond

GDP growth. The EU is well-placed to assume an international leadership role and promote

inclusive growth and equality, with the United Nations (UN) Sustainable Development Goals

(SDGs) at the centre of economic policy

. The SDGs can be regarded as a means to achieving

greater resilience. In turn, strategic foresight can help identify the best ways to meet the

SDGs.

Strategic foresight can help identify further social and economic opportunities and

pathways to achieve the green, digital, and fair transitions.

This includes designing

new social and fiscal reforms and testing their long-term sustainability, to reinvigorate

Europe’s social market economy model while ensuring the EU’s leading role in the global

The megatrend ‘changing nature of work’ (https://ec.europa.eu/knowledge4policy/foresight/changing-nature-work_en)

has accelerated.

https://www2.deloitte.com/be/en/pages/covid-19/articles/workforce/workforce-strategy.html

The megatrend ‘diversification of education and learning’

(https://ec.europa.eu/knowledge4policy/diversification-education-learning_en)

has accelerated.

https://ec.europa.eu/info/publications/2020-european-semester-annual-sustainable-growth-strategy_en.

The SDGs (https://www.un.org/sustainabledevelopment/sustainable-development-goals/) are a roadmap for humanity encompassing

almost every aspect of human and planetary well-being.

They are a key tool to reboot Europe’s growth strategy towards competitive

sustainability, ensuring that the economy works for everyone and that growth is sustainable. To support the central role of SDGs in

economic policymaking, and in particular in the European Semester, Eurostat publishes an

annual monitoring report.

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economy. Strategic foresight is also relevant for shaping the occupations of the future,

identifying new skills necessary for the green and digital economy, learning patterns and

partnerships, and understanding the related interplay between new technologies, jobs,

education, and key stakeholders. In light of broader demographic trends affecting some rural

areas, challenges exacerbated by regional and local inequalities, as well as a geography of

discontent, a long term vision on rural areas will also be required, taking into account social

and economic development, infrastructure needs, access to basic services, and territorial

cohesion; this long-term vision should cut across several policy areas and require an

integrated and coordinated approach at European, national, and regional level. Finally,

strategic foresight could support the reflection on a new meaning for progress and wellbeing

and on indicators that would be most meaningful for measuring these aspirations (Section

4).

3.2. The geopolitical dimension

Geopolitical resilience relates to Europe

bolstering its ‘open strategic autonomy’

and global leadership role.

It is anchored in the expression of the EU’s values within a

highly interdependent world of competing powers, where COVID-19 has impacted

geopolitical trends and power balances. As the United States turns further inwards, it leaves

a void on the global stage, which other players such as China

are eager to fill. In mobilising

strategic resources for humanitarian and development aid and striving to make a COVID-19

vaccine and medicines available

worldwide, the EU is playing a leading role through its ‘Team

Europe’ approach

Capacities

The EU is considered a trusted partner and responsible leader.

As the global order

threatens to erode and fragment, the EU can act as an anchor of stability and a guarantor

of peace. The EU mediates in situations of crisis, brokers international agreements and uses

its convening power to craft global solutions to global problems. The pandemic shows that

global challenges require effective, agile international cooperation and common solutions.

The EU actively shapes cooperation in global governance structures, and its foreign and

security policy is underpinned by multi-faceted diplomacy and strategic partnerships with

key players and regions. The EU’s

foreign and security policy priorities are driven by its global

strategy. Understanding the importance of security and defence cooperation, the EU has,

amongst other things, established a European Defence Fund and the Permanent Structured

Cooperation (PESCO)

, and has launched a military mobility initiative.

Open strategic autonomy is defined as the EU’s commitment to open and fair trade, preserving the benefits of an open economy

and

supporting partners around the world to lead the renewed and reinvigorated form of multilateralism the world needs. At the same time,

the EU is aware of the need to reduce its dependency and strengthen its security of supply across key technologies and value chains

(COM(2020)456 final,

Europe's moment: Repair and Prepare for the Next Generation).

https://www.cfr.org/conference-calls/after-covid-19-chinas-role-world-and-us-china-relations.

The objective of the “Team Europe” approach is to combine resources from the EU, its Member States, and financial institutions,

particular the European Investment Bank and the European Bank for Reconstruction and Development.

Articles 42(6) and 46 TEU, and Protocol No 10.

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Europe’s extensive global trade capacity underpins its geopolitical power and

resilience.

An analysis of trade dependency for products relying on a small number of

suppliers shows that, for almost all products imported into the EU, there are alternative

sources of supply. Just 1% of the EU’s total import value is sourced from a sole supplier,

whereas 10% is sourced from no less than 67 alternative suppliers, and half of all products

come from more than 25 suppliers worldwide

. In addition, over two-thirds of EU imports

are intermediate inputs used in its production processes. The EU is therefore consistently

able to use its economic leverage and bargaining power to deliver international agreements

that protect its citizens.

The EU is a space power.

It has developed critical space capabilities, which serve as a

geopolitical tool to strengthen its global role in technology development and surveillance

Several critical economic sectors rely on services provided

by Europe’s space-based

assets.

The EU builds resilience in its neighbourhood and beyond.

It is the world’s largest

donor of development and humanitarian aid, focusing in particular on its neighbourhood and

Africa. Europe supports partner countries with funding, training and structural improvements

to boost their development and resilience, as well as in implementing the SDGs. In addition,

through the Eastern Partnership initiative, the EU contributes to increasing the stability,

prosperity and resilience of its neighbours, by helping them progress in the green and digital

transitions.

The EU has a long-standing capacity and legacy in shaping international standards

and norms.

It now needs to strengthen forward-looking alliances to continue shaping

international norms and standards in a way that reflects European values and interests.

Despite the EU’s track record of proactive engagement with the UN family and other

international organisations in various fora

, such alliances are particularly relevant in the

face of growing pressure from influential global players.

The EU can apply its geopolitical capacities and international clout coherently and

effectively now and in the future.

Europe will need to continue developing a strategic

network of partnerships and alliances to reduce dependencies in critical value chains, help

peace and stability in its neighbourhood, seek effective solutions to global problems and

revitalise a rules-based multilateral global order, as well as to leverage its financial

resources in support of its political objectives. The EU is in a strong position to shape the

multilateral system of global economic governance, develop mutually beneficial relations to

boost its competitiveness

, and to advance and set global standards for the green and

digital transitions. This should be done while promoting its democratic values and ensuring

coherence with broader priorities in the areas of sustainability, climate change, digital

economy and security.

https://ecipe.org/blog/how-survive-trade-apocalypse/.

For instance, satellite navigation, Earth Observation, telecommunication, For Galileo Public Regulated Service.

The United Nations Conference on Trade and Development (UNCTAD), the International Telecommunications Union (ITU), and the World

Intellectual Property Organisation (WIPO). Also, with the G7, the G20, the OECD, the Council of Europe, Internet Cooperation for Assigned

Names and Numbers (ICANN), the World Trade Organization (WTO), ASEAN and ASEM.

COM(2020)102 final, A New Industrial Strategy for Europe; SWD(2020)98 final, Identifying Europe's recovery needs.

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Vulnerabilities

Multilateralism and the global financial system are under increasing pressure from

narrow national interests.

Preserving a space for consensus-building and joint action to

address global challenges and protect common public goods is central to geopolitical

resilience.

The shift of power to the East and South is a global megatrend.

Although it has

temporarily decelerated as a result of the COVID-19 crisis, it is likely to continue as it is

driven by the growing economic and political weight of emerging players, supported by their

demographic weight. As the EU’s share in the world population and in global GDP

diminishes

, this may have a further impact on its clout in many critical areas.

The security environment is continuously changing.

It is marked by the shifting balance

of power, increasing use of hybrid threats, space and cyber warfare, disinformation, and the

growing role of non-state actors

. The crisis has also further exacerbated pressures that can

lead to conflict. The impact of economic measures driven by political considerations, such as

the extra-territorial impact of sanctions or protectionist measures, poses additional

challenges to the EU. The COVID-19 pandemic has shown the fragility of key infrastructure

and the need to protect it against physical and digital threats

. The crisis has also worsened

existing vulnerabilities and inequalities in conflict-affected and fragile countries. To foster a

coherent strategic vision, the EU needs a common understanding of the security environment

as well as common goals and objectives. By the end of 2020, the High Representative will

present an analysis of threats and challenges, as background for a Strategic Compass on

security and defence, to be delivered by 2022. This will provide a crucial contribution to

developing a common European security and defence culture, give new impetus to different

defence initiatives and reinforce their coherence

Managing migration in an orderly way will continue to be a priority.

The root causes

of migration, including local conflicts, poverty and inequalities exacerbated due to the COVID-

19 crisis and climate change, will continue

75,76

. Addressing these challenges

will require

enhanced attention, agility, resources, and diplomatic efforts underpinned by assistance,

alongside strategic, balanced and tailor-made partnerships with key third countries in order

to find sustainable and effective solutions to managing migration

A lack of unity in specific foreign and security policy areas is a source of fragility.

The EU’s strength

and credibility abroad has a direct correlation to its internal unity and

https://ec.europa.eu/research/social-sciences/pdf/policy_reviews/global-europe-2050-report_en.pdf.

COM(2020)605 final, The EU Security Union Strategy.

Ibidem

D. Fiott, 2020, Uncharted territory? Towards a common threat analysis and a strategic compass for EU security and defence, European

Institute of Security Studies

The World Bank estimates that, by 2050, climate change could force over 140 million people to become internal climate migrants across

Africa, South Asia and Latin America (https://www.worldbank.org/en/news/press-release/2018/03/19/climate-change-could-force-over-

140-million-to-migrate-within-countries-by-2050-world-bank-report).

This also requires further evidences and research, analysing the complexity of long-term intertwined factors, as part of the foresight

approach, as developed by the Knowledge Centre for Demography (https://ec.europa.eu/knowledge4policy/migration-demography_en).

COM(2020)605 final, The EU Security Union Strategy.

Solutions will be put forward by way of legislative and non-legislative initiatives under the new Pact on Migration and Asylum.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

cohesion, which builds on its diversity. A lack of unity and coordination among Member States

can, at times, limit the effectiveness and agility of action at EU level, which might enable

foreign powers to apply divide-and-rule strategies.

The COVID-19

crisis has revealed Europe’s overreliance on non-EU

suppliers for

critical raw materials

, and has highlighted how supply disruptions can affect

industrial ecosystems and other productive sectors.

While there are alternative

sources of supply for most products, Europe is increasingly reliant on a limited number of

external suppliers for some critical goods, components, and raw materials (Box

3.1),

as well

as agricultural products. Factory closures in COVID-19 hotspots in China and northern Italy

led to Europe-wide shutdowns of automotive plants, resulting in losses equivalent to 12.5%

of the total production for 2019

. A similar picture emerges for pharmaceuticals from India

leading to shortages in generic drugs

. In April 2020, European industrial production had

decreased by 27% over 12 months

. Moreover, Europe relies heavily on third countries for

advanced components for data processing, in particular microprocessors, with only around

10% of global production in the EU

. With escalating global tensions, European supply chains

are increasingly vulnerable.

Global supply chains are highly complex. Multinational enterprises are responsible for two thirds of international trade with a high

fragmentation of production of intermediate goods shipped between different production sites (https://iap.unido.org/articles/lessons-past-

disruptions-global-value-chains; https://www.entrepreneur.com/article/349229).

https://www.acea.be/press-releases/article/298-automobile-factories-operating-across-europe-new-data-shows.

https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm.

https://ec.europa.eu/eurostat/documents/2995521/10294900/4-12062020-AP-EN.pdf/93c51a4c-e401-a66d-3ab3-6ecd51a1651f

https://www.economist.com/leaders/2018/12/01/chip-wars-china-america-and-silicon-supremacy.

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Box 3.1: CASE STUDY - Critical raw materials

Irrespective of supply disruptions during the COVID-19 crisis, the EU is heavily dependent

on non-EU countries for critical raw materials that are essential for staying at the forefront

of global competition

–

be it in economic or defence terms (Figure 3.1).

Addressing over-

dependency on non-EU countries for critical raw materials

, such as graphite, cobalt, lithium and rare

earths

, is therefore one of the crucial elements to bolster Europe’s open strategic autonomy in key

technologies needed to achieve a carbon-neutral and digital society. These include batteries, fuel cells,

solar and wind energy, as well as hydrogen. As more of these technologies are deployed, the EU risks

replacing its reliance on fossil fuels with a dependency on a range of raw materials, many of which

are sourced from abroad. According to a high demand scenario, the EU would need 18 times more

lithium by 2030 and 60 times more by 2050

Figure 3.2

indicates that global extraction of raw

materials, including critical raw materials, is projected to more than double by 2050.

High dependency calls for greater resilience and diversification of supply,

notably by making

better use of EU domestic sourcing, the circularity of raw materials or the extension of products’

lifetime with a focus on reuse, repair and recycling, as well as through our strategic trade policy and

diplomacy.

Exploiting the

urban mines,

that is, recovering raw materials from urban waste through

recycling, could eventually satisfy a large share of the EU’s demand for critical raw

materials

Europe is a global leader in its infrastructure for recycling metals, and European industry

produces over half of its base metals from recycled sources, compared to 19% in the rest of the world.

But more needs to be done if the EU is to secure the resources it needs to realise the green and digital

transitions.

Europe’s own mineral resources are under-exploited,

and the EU has vulnerabilities in

processing, recycling, refining and separation

This is due to high production costs compared to

global market prices, high environmental standards and current low levels of public acceptance.

Investment in the production of primary and secondary raw materials would benefit employment in

all manufacturing industries. Mining and refining in the EU already employs 3.4 million workers, while

related manufacturing accounts for a further 25 million jobs. Repair and materials recovery provide

2.2 million jobs, a number which is growing.

These investments could help retain existing geological

and metallurgical high-tech skills and develop new ones

to boost the EU’s global competitiveness

in a

sector that has solid growth potential in the 21

century. However, investments in the EU’s mining

capacities should not come at the expense of environmental standards.

Strategies to overcome dependencies include diversifying sources, developing substitutes, or prolonging the life of related products.

European industry, especially battery, motor and wind generator production, depends on imports of graphite (of which 48% comes from

China), cobalt (of which 68% comes from the Democratic Republic of Congo), lithium (of which 78% comes from Chile) and rare earths (of

which nearly 100% come from China).

European Commission,

Critical Raw Materials for strategic technologies and sectors

–

a foresight study,

2020 (doi: 10.2873/58081).

www.prosumproject.eu.

https://minatura2020.eu.

kom (2020) 0493 - Bilag 1: Kommissionens fremsynsrapport vedr. generelle, langsigtede tendenser – herunder nye muligheder og udfordringer – og EU’s strategiske interesser

Figure 3.1

Supply risk of raw materials for key technologies

Figure 3.2. Global material extraction by resource type

Figure 3.1 shows supply risks for raw materials (on a scale of 1 to 6), key technologies in which they are used and their geographical

sources.

European Commission, 2020, Critical Raw Materials for strategic technologies and sectors

–

a foresight study (doi: 10.2873/58081).

OECD, 2019, Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences, OECD publishing, Paris...

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Trade and investment have plunged, undermining global prosperity and stability.

According to estimates, world trade volumes will drop by between 9% (IMF) and 32% (WTO)

in 2020, while foreign direct investment has decreased by 28.2% in the first half of 2020

compared to the same period in 2019

Europe’s economic sovereignty is at stake.

Other global powers are combining

geopolitical and economic interests to increase their influence in the world. This includes

protectionism, export control and the international role of currencies. While the international

role of the euro is rising, it is still far from challenging that of the US dollar. COVID-19 put

Europe’s industrial and corporate assets under

stress, which calls for protecting its economic

sovereignty through an integrated strategy

. Insolvencies due to the pandemic are exposing

the EU’s strategic industries to hostile foreign takeovers. This raises the chances of foreign

investors attempting to acquire strategic European assets, especially in the health, defence

and space supply chains

, as well as for critical infrastructures. To preserve EU companies

and critical assets, the EU’s openness to foreign investment needs to be balanced by the

appropriate tools

. The regulation on Foreign Direct Investment Screening

will help

safeguard Europe’s security and public order through a cooperation mechanism between the

Commission and the Member States to address concerns on incoming foreign direct

investment.

Foreign subsidies should also be addressed as they can distort the EU’s internal

market and undermine the level-playing field

The crisis accelerated attacks from authoritarian regimes against democratic

systems via misleading narratives.

The spread of mis- and disinformation and

conspiracy theories represents a threat to democracy

. Conspiracy theories about COVID-19

and the propagation of general vaccine hesitancy are continuing to put people’s lives at risk

Such ‘infodemics’

100

are both cause and consequence of rising distrust of governments and

media

101

, raising the pressure on the EU to protect more energetically the values it was built

on and step up efforts to defend democracy and the rule of law. The EU institutions are

contributing to the fight against mis- and disinformation

102

, thereby increasing democratic

resilience, which is at the core of the upcoming European Democracy Action Plan.

The drop refers to the number of deals regarding acquisition of equity stakes of at least 10% of the total capital between January and

June 2020 compared to 2019. The drop is -33.5% for intra-EU cross-border investments, and -23% for non-EU investments in Europe.

Source: JRC Foreign Investment Bulletin, July 2020, JRC 121392.

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_528,https://www.bruegel.org/wp-content/uploads/2019/06/PC-

09_2019_final-1.pdf, https://peacediplomacy.org/2019/10/25/how-eu-can-achieve-economic-sovereignty/.

C(2020)1981 final, Guidance to the Member States concerning foreign direct investment and free movement of capital from third

countries, and the protection of Europe’s

strategic assets, ahead of the application of Regulation (EU) 2019/452 (FDI Screening Regulation).

Ibidem.

Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening

of foreign direct investments into the Union. The regulation will apply as from 11 October 2020.

COM(2020)253 final, White Paper on levelling the playing field as regards foreign subsidies.

JOIN(2020)8 final, Tackling COVID-19 disinformation - Getting the facts right; see also

https://euvsdisinfo.eu/eeas-special-report-

update-short-assessment-of-narratives-and-disinformation-around-the-COVID-19COVID-19-pandemic/.

A hoax about the connection of 5G, chipping and COVID-19 spread widely on social media (Downing, J., Ahmed, W., Vidal-Alaball, J. &

Lopez Seguí, F., 2020, Battling fake news and (in)security during COVID-19. E-International Relations).

100

Infodemics are the result of the simultaneous action of multiple human and non-human sources of fake or unreliable news

(https://arxiv.org/pdf/2004.03997.pdf).

101

https://www.cogitatiopress.com/politicsandgovernance/article/view/2478.

102

https://www.europol.europa.eu/staying-safe-during-covid-19-what-you-need-to-know; https://ec.europa.eu/info/live-work-travel-

eu/health/coronavirus-response/fighting-disinformation_en.

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Opportunities

The shift towards an increasingly multipolar world offers a new opportunity for

Europe to reinforce its role in the global order and lead the revival of multilateral

governance structures.

The globalisation process, which has temporarily slowed down, is

likely to resume once the crisis is over. At the same time,

glocalisation

–

combining global

business models with more consideration for localisation of production, consumption, and

taxation

–

offers renewed opportunities for the EU to position itself as a frontrunner and role

model to the world, provided the right conditions are in place (e.g. taxation, availability of

funding, standards).

Strong cooperation with like-minded democracies is increasingly important.

The EU

must protect the openness and democratic nature of its model, and needs to rally its partners

in these efforts, safeguarding its fundamental values from foreign interference. Upholding

democracy, human rights and the rule of law must start at home and should continue to be

the guiding principle of the EU’s external relations, including with regards to digital

technologies. Issue-based cooperation and partnerships with like-minded countries, and

other countries where possible, is an investment in multilateral governance and initiatives.

With its convening power, the EU can be a first-choice partner for countries around the world.

Boosting Europe’s open strategic autonomy is an imperative.

The crisis offers an

economic, social, and ecological opportunity to strengthen the EU’s resilience to future shocks

and secure its place in next-generation global value chains. As stated in the European

recovery plan, this means shaping global economic governance and developing mutually

beneficial bilateral relations, while protecting ourselves from unfair and abusive practices.

This is key to helping the EU diversify and solidify global supply chains in critical sectors,

intensifying ties with partners, including in Africa, re-shoring production where necessary,

developing substitutes through innovation, and increasing our strategic reserves

103

A reliable supply of food also needs to be ensured across the EU.

The Commission

will thus continue monitoring food security and competitiveness. It will further assess the

resilience of the food system and step up its coordination of a common European response

to crises. As the biggest importer and exporter of agri-food products, the EU will further

promote the global transition to sustainable food systems.

Being more strategic about raw materials is fundamental.

The EU must secure a

sustainable supply of critical raw materials. This means building diversified value chains,

decreasing dependence, raising circularity, supporting innovation for alternatives and

ensuring a greener and socially-responsible level playing field in the single market and

beyond. Key opportunities include the upcoming European Raw Materials Alliance

104

and the

EU Raw Materials Intelligence Capacity

105

, to explore these issues with industry and other

key stakeholders.

103

104

COM(2020)102 final, The new industrial strategy.

COM(2020)474 final, Critical Raw Materials Resilience: Charting a Path towards greater Security and Sustainability.

105

https://publications.jrc.ec.europa.eu/repository/bitstream/JRC109889/jrc109889_mica_jrc_technical_report_1.pdf.

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A stable rules-based trading system and a level playing field are key objectives

for the EU.

Only a strong trade and investment policy can support the post-COVID-19

economic recovery, create jobs, protect EU companies from unfair practices at home and

abroad, and ensure coherence with broader priorities in the areas of sustainability, climate

change, the digital economy and security

106

. The current crisis may provide an opportunity to

drive meaningful reforms of the World Trade Organization (WTO) and build more

competitive, sustainable and resilient economies. The EU has already launched a health

initiative in the framework of the WTO to further support the global availability and provision

of essential health products. The EU is now in the process of reviewing its trade policy, in

view of strengthening its open strategic autonomy.

Industrial alliances can be at the forefront of this change, bringing together

investors, public institutions and industrial partners to help industry develop

strategic technologies.

This approach is already showing results in the areas of batteries

and hydrogen. In this context, a number of existing and forthcoming alliances

107

will help

Europe lead the green and digital transitions, maintain industrial leadership and benefit

European businesses and society while reinforcing Europe’s resilience.

Strategic foresight can be used to identify possible

scenarios for the EU’s place in

the future global order and chart the best path towards the desired future.

It can

help develop a forward-looking

analysis of how to leverage the EU’s power to support its

strategies for cooperation and partnerships. It also helps identify possible alliances, analyse

different ecosystems and assess risks, opportunities and future needs for strategic

industries. Moreover, foresight helps define strategic options for the best combination of

approaches to open strategic autonomy, from diversifying trading partners to strengthening

the EU’s own capacities.

3.3. The green dimension

Green resilience is about reaching climate neutrality by 2050, while mitigating and

adapting to climate change, reducing pollution and restoring the capacity of

ecological systems to sustain our ability to live well within planetary boundaries.

This entails eliminating our dependency on fossil fuels, reducing our impact on natural

resources, preserving biodiversity, developing a clean and circular economy, achieving a

toxic-free environment, changing lifestyles, production and consumption patterns, climate-

proofing infrastructure, creating new opportunities for healthy living, green business and

jobs, actively pursuing ecosystem restoration, as well as saving our seas and oceans.

106

107

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1058.

The European Battery Alliance, the Plastic Alliance, the European Clean Hydrogen Alliance, the European Alliance for Industrial Data and

Clouds and the European Raw Materials Alliance.

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Capacities

The European Green Deal aims to achieve a climate-neutral society by 2050,

while

pursuing resilience to both mitigate and adapt to the impact of climate change,

environmental degradation and biodiversity loss. This

is an integral part of this Commission’s

strategy to implement the UN’s 2030 Agenda and the SDGs. It implies a full decarbonisation

of the power sector and a substantial electrification of energy demand. Land use emissions

need to be zeroed and the land use sink needs to be enhanced by restoring the environment

and adapting the farming sector, while ensuring a higher quality of life for everyone in the

EU in a cost-efficient manner so as to bring further economic growth and enable Europe to

act as a beacon

of transformation for the rest of the world. To pursue this path, the EU’s

capacities should be boosted to recover from the crisis and invest in long-term sustainability

(Box

3.2).

Box 3.2: Foresight scenarios for the EU 2050 climate

strategy & relevance for the Green Deal

The last two decades have witnessed 18 of the warmest years on record

. If temperatures

continue rising at just 0.2 °C per decade, the yearly damage from river floods in Europe

could increase from €5 billion to €112 billion and 16% of

the present Mediterranean

climate zone may become arid and non-productive by the end of the century. By 2050,

climate change, biodiversity loss and flooded coastal areas could force over 140 million

people to become internal migrants across Africa, South Asia and Latin America

The EU’s greenhouse gas emissions reduction strategy submitted to the United Nations

Framework Convention on Climate Change (UNFCCC)

, has been informed by

eight

scenarios with foresight dimensions

. The first five scenarios addressed the

well below

2°C

ambition, aiming at greenhouse gas emissions reduction levels in 2050 of around

80% compared to 1990. They considered differentiated portfolios of options for

decarbonisation and identified trade-offs: for example, pathways that focus more on

electrification for end-use

also need high deployment of storage (six times today’s levels)

to deal with variability in electricity production, but pathways which deploy more hydrogen

require more electricity to produce it in the first place

. Actions and technologies from the

first category’s five scenarios were combined into a sixth scenario (COMBO). This results

in net greenhouse gas emissions reduction in 2050 close to 90% compared to 1990, with

little reliance on negative emissions technologies and without changes to consumer

preferences.

Finally, the two last scenarios considered what is necessary for the EU to reach net zero

greenhouse gas emissions by 2050, thus doing its share in the global effort towards the

Paris Agreement’s goal to pursue efforts to limit temperature increase to 1.5°C compared

to pre-industrial levels. The seventh scenario looks at carbon capture and storage, and the

eighth scenario assumes a drive towards a more circular economy brought about by EU

business and consumption patterns. The latter includes a continuation of the trend towards

less carbon-intensive diets, the sharing economy in transport, the use of more sustainable

transport modes and more rational use of energy for heating and cooling.

The scenarios showed the portfolio of options mobilising existing and new technologies in

all economic sectors for Europe to be climate-neutral by 2050. While scenario work

continues to support the development of climate policy, the green transition requires all

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hands on deck.

The European Green Deal has set up a transformative agenda built

around the following elements,

while being committed to mainstreaming sustainability

in all EU policies and to ensure a just transition:

increasing the EU’s

climate ambitions for 2030 and 2050;

supplying clean, affordable and secure energy;

mobilising industry for a clean and circular economy;

building and renovating in an energy- and resource-efficient way;

accelerating the shift to sustainable and smart mobility;

from ‘farm to fork’: a fair, healthy and environmentally-friendly

food system;

7. preserving and restoring ecosystems and biodiversity;

8. a zero pollution ambition for a toxic-free environment.

The EU’s regulatory power, notably in the

environmental field, can lead to the

highest standards being used to underpin competitive sustainability.

In recent

decades EU action has significantly improved not only the quality of Europe’s environment,

but also the lives of its citizens. In many areas, EU environmental standards have been

emulated by other countries. The EU was the first global region to pass binding legislation

to enshrine climate and energy targets and become a highly energy-efficient climate-neutral

economy

108

The EU is a global leader in the shift towards a clean and circular economy.

European consumers are an important force in this effort. According to the circular economy

action plan

109

, EU support should target priority value chains, while taking into consideration

sectors and business models with opportunities for job creation

110

. Circular economy

investments and policy tools (e.g. ecodesign

111

, energy labelling, green public procurement,

digitally-enabled circular business models, and the Eco-Management and Audit Scheme) will

help reduce overall environmental and climate footprints.

EU industrial frontrunners are demonstrating how clean, bio and circular

production and services are important drivers of competitiveness and growth.

Resource efficiency improvements, pollution prevention and control, water protection,

adoption of new circular business models, cleaner production, eco-innovation, and the

development of green markets are turning many European industries into global leaders. The

Commission aims to ensure consistency and synergies between environmental, climate,

energy and industrial policies

112

. This entails going beyond ‘punishing polluters’ to providing

a framework conducive to avoiding pollution and increasing energy and material efficiency.

Moreover, EU support to a sustainable

bioeconomy seeks the transformation of Europe’s

108

109

https://ec.europa.eu/clima/sites/clima/files/docs/factsheet_climate_change_2015_en.pdf.

https://ec.europa.eu/environment/circular-economy/pdf/new_circular_economy_action_plan.pdf.

110

https://ec.europa.eu/environment/circular-economy/pdf/leading_way_global_circular_economy.pdf.

111

It should be noted that up to 80% of products’ environmental impacts are determined at the design phase.

112

https://ec.europa.eu/environment/industry/.

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agricultural and industrial base through the creation of new bio-based value chains, as well

as greener, more cost-effective industrial processes. It also enhances the overall status of

our natural resources and ecosystems. Bio-based industries could create a million new jobs

by 2030

113

The massive investment to assist the recovery will boost the green transition.

move towards a climate-neutral society and environmentally sustainable economy, there is

a need to pool funding sources at all levels. The EU budget and recovery package including,

among others, specific instruments like the Sustainable Europe Investment Plan

114

and the

Innovation Fund

115

aim to mobilise private and public resources over the next decade to

target climate, environmental and social investments related to the sustainable transition

116

The Commission is also preparing a renewed sustainable finance strategy, to create

sustainable investment opportunities and enhance sustainability-related risk management.

As stated by the European Council, 30% of the €1.82 trillion agreed under the 2021-2027

multiannual financial framework and Next Generation EU will go to climate-related

spending

117

. Funding in all areas must be based on the ‘do no harm’

principle

118

. The Just

Transition Mechanism, including the Just Transition Fund, will support Member States and

regions most affected by the transition towards climate neutrality

119

Europe’s blue economy plays an important role in contributing to resilience.

Preserving marine ecosystems is key to ensuring the future of maritime economic sectors.

In addition to natural resources for the economy, Europe’s oceans and seas provide a habitat

for marine life, carbon sequestration, renewable energy, and coastal protection against

climate change.

Vulnerabilities

Climate change is making extreme weather events more frequent and more

intense, including in Europe

120

. The global average temperature increases hide even more

extreme regional impacts. These range from unprecedented forest fires and heatwaves

above the Arctic Circle to increasingly devastating droughts in the Mediterranean region; and

from accelerating coastal erosion on the Atlantic coast to more severe flooding and

decimated forests in Central and Eastern Europe. All this comes with a terrible price tag

–

recent projections show that exposing the EU economy to global warming of 3°C would result

113

COM(2018)673 and SWD(2018)431, A sustainable Bioeconomy for Europe: Strengthening the connection between economy, society

and the environment; EuropaBio Report, 2016, Jobs and growth generated by industrial biotechnology in Europe.

114

https://ec.europa.eu/clima/policies/innovation-fund_en.

115

https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_24.

116

https://ec.europa.eu/commission/presscorner/detail/en/fs_20_48.

117

So-called

‘climate mainstreaming’.

See:

https://www.consilium.europa.eu/media/45109/210720-euco-final-conclusions-en.pdf.

118

The ‘do no harm’ principle means that no activity or

funding will undermine or counteract climate or environmental objectives.

119

https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/actions-being-taken-eu/just-transition-mechanism/just-

transition-funding-sources_en.

120

The 2020 State of the European Environment report concludes that climate change has substantially increased the occurrence of

climate and weather extremes.

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in an additional annual loss of at least €170 billion (1.36% of GDP) and would cost tens of

thousands of lives

121

Our current production and consumption model is increasingly exposing people and

the environment to the impact of hazardous substances.

Chemical pollution affects

health and the antibody response to vaccines

122

, increasing morbidity and mortality from

communicable diseases

123

. The world is failing to reach the agreed target for the sound

management of chemicals and waste

124

, while global chemical production is set to double

by 2030

125

, and the impact on people and the environment will be exacerbated without

adequate policy measures. In the European Green Deal, the Commission has committed to

move towards a toxic-free environment. This major goal will however require joint efforts by

all societal actors to promote a real shift towards safe and sustainable chemicals, as well

as a renewed global commitment.

Lower environmental protection standards and related costs in third countries may

push some polluting activities and waste outside the EU with a higher risk of

carbon leakage

126

. In addition, there are not always effective measures preventing exports

of toxic and pollutant waste to non-EU countries

127

. At the same time, the economic crisis

caused by COVID-19 risks intensifying these practices as countries seek to boost growth at

all costs. The EU should promote its values and standards internationally, which is key to

protecting its environmental norms, industries, workers and consumers. Otherwise, the EU is

likely to lose further competitiveness and fail to see a reduction in trade exports in polluting

sectors, while gaining comparative advantages in less polluting industries

128

The increasing exploitation of renewable and non-renewable natural resources

cannot be sustained,

as they are jeopardising prospects for future sustainable

development. Biodiversity loss on land and at sea, the rising extraction costs of minerals,

soil, water and air pollution

129

, as well as unrelenting greenhouse gas emissions from

unsustainable levels of consumption of raw materials, energy, water, food and land use, are

threatening the long-term livelihood of millions of people, including in Europe. Although the

pressure on nature has temporarily slowed down as a result of the economic downturn due

to confinement measures, the challenge in the future will be to decouple growth and

https://ec.europa.eu/jrc/en/peseta-iv.

Epidemiological studies support the conclusion that PFOS and PFOA are associated with reduced antibody response to vaccination;

EFSA’s scientific opinion on PFAS

123

C&en, 2019,

Linking pollution and infectious disease;

Science Daily, 2 October 2019,

Environmental toxins impair immune system over

multiple generations.

Exposure to endocrine disruptors can damage the development of the endocrine, immune or neurological systems.

124

SDG 12.4, to be reached by 2020.

125

Global Chemical Outlook II, 2019.

126

Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer

production to other countries with laxer emission constraints.

127

Interpol Strategic Analyse Report, 2020, Emerging criminal trends in the global plastic waste market since January 2018

(https://www.interpol.int/News-and-Events/News/2020/INTERPOL-report-alerts-to-sharp-rise-in-plastic-waste-crime).

128

http://www.oecd.org/economy/greeneco/How-stringent-are-environmental-policies.pdf.

129

Exposure to air pollution can lead to adverse health effects, including respiratory and cardiovascular diseases. A number of health

authorities have warned that those citizens with certain pre-existing conditions, such as respiratory illnesses, may have an increased

vulnerability to COVID-19. However, at present it is not clear whether and to what extent ongoing exposure to air pollution might worsen

the condition of those infected by the virus. Further epidemiological research is needed (https://www.eea.europa.eu/themes/air/air-quality-

and-covid19).

122

121

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wellbeing from consumption of natural resources and its resulting environmental impacts on

a long term basis.

COVID-19 appears to have spread more quickly in dense urban areas and poor

neighbourhoods.

Over 70% of Europe’s population live in cities; this number is expected to

increase to over 80% by 2050130. This translates into 36 million new urban dwellers, who

will need housing, employment and care, thereby increasing pressure on city infrastructure.

On the one hand, population density does facilitate the spread of diseases. On the other

hand, urban areas have capacities that some of their rural counterparts still lack, such as

proximity to healthcare facilities and digital infrastructure.

COVID-19 illustrates the connection between human development and the

environment.

Contemporary pandemics like COVID-19 and previous ones such as AIDS or

Ebola find their origin in humans encroaching on natural wildlife habitats and the destruction

of ecosystems

131

. This occurs due to environmental crime (e.g. logging and trade of exotic

species), some forms of farming, mining, and urbanisation, driven by resource-intensive

lifestyles.

Opportunities

The fast improvement of some environmental parameters resulting from the

confinement showed how resilient nature can be.

Nature-based solutions

132

, like green-

space initiatives and nature restauration plans, can contribute to the cost-effective

greenhouse gas emission reductions needed by 2030, while having numerous co-benefits

like flood protection, cooling during heatwaves and recreational use. Pollution reduction also

dramatically improves human health

133

. For the first time since the 1970s, the date at which

we will exceed the resources of the planet beyond the global sustainability rate has been

shifted backwards

134

. While many of the pollution reductions linked to the confinement are

likely to be only short-term, they do offer the opportunity to inform more long-term,

economically sustainable green transitions and more sustainable consumption patterns in

order to guarantee prosperity and health.

Using fewer primary resources in a circular economy benefits the environment and

the economy.

This includes resource efficiency measures and sustainable use of renewable

resources, circular business models and product policy. The new circular economy action plan

highlights the importance of these factors in delivering on our climate ambition by reducing

environmental footprints, the emission of greenhouse gases and other harmful substances,

and biodiversity loss. They are also key to creating business opportunities for the EU,

130

131

https://ec.europa.eu/research/environment/index.cfm?pg=nbs

Around 75% of all emerging infectious diseases cross over from wildlife to humans (www.ncbi.nlm.nih.gov/pmc/articles/PMC5711319/).

132

Nature-based solutions can pave the way to a more resource-efficient, competitive and greener economy and create new jobs and

economic growth by manufacturing and delivering new products and services that improve nature rather than depleting it

(https://ec.europa.eu/research/environment/index.cfm?pg=nbs).

133

https://www.ethicalcorp.com/wake-call-we-must-live-within-our-planetary-boundaries-avoid-future-pandemics.

134

https://www.overshootday.org.

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facilitating market access, and decreasing our dependency on non-EU countries for raw

materials

135

COVID-19 has highlighted the importance of strengthening the resilience of urban

areas.

These are important hubs of innovation and key to making the most of the green

transition, which calls for reinforced participatory governance and collective engagement

towards a fairer and more sustainable future. Cooperation between EU institutions and cities,

as well as partner cities around the globe, has great potential to make Europe a world

reference point in identifying, experimenting with and applying solutions to current and

future challenges that cities will face, including those related to climate change. For

example, repurposing spaces like office buildings or brownfield sites provides abundant

opportunities for bringing nature back to cities and improving the wellbeing of people in the

urban environment, including through reconsidering mobility and consumption behaviours.

Strategic foresight can be used to analyse and identify potential areas for bottom-up

innovations and solutions to city problems, thus connecting those directly affected with

innovators, investors and start-ups

136

Box 3.3: CASE STUDY - Green jobs

The preservation or restoration of environmental quality is at the heart of many jobs of the

future.

These jobs will occur in agriculture, (re)manufacturing, construction, research and development,

administration and services. They include, for instance, sustainable food production and distribution,

green and efficient building, water quality and regeneration, green design, forestry, urban and landfill

mining, repair and recycling of raw materials, pharmaceuticals, low-emissions mobility and transport,

renewable energy, ocean acidity, and footprint managers. Resource constraints and the need for

increased efficiency will transform many professions, bringing in new business models and requiring

new skills.

Our environmental policies are contributing to a structural shift in the labour market.

Some

analyses estimate that a large proportion of EU jobs may evolve in a way that contributes to reducing

greenhouse gas emissions and addressing environmental degradation. Jobs in heavily polluting

industries represent a mere fraction of employment in the EU

137

and there are significant job

opportunities in reducing the impact of those industries. The eco-industry, which directly mitigates

environmental damage, is in itself becoming an important source of new jobs

138

. Moreover, increasing

material productivity (i.e. resource efficiency) drives labour intensity and value added products, hence

135

136

https://ec.europa.eu/environment/circular-economy/pdf/leading_way_global_circular_economy.pdf.

For example, the research project ‘The Future of Government 2030+’ by the Commission’s Joint Research Centre

explored changing

power relationships in society and new governance models and actors. The project examined stronger alliances of local governments

through new types of political institutions (such as the European Parliament of Mayors) and stronger inclusion of individuals in policymaking

through Citizen Councils. It has also proposed better synergies between the public and private sectors (especially the start-up culture)

(https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/future-government-2030-policy-implications-and-

recommendations).

The Commission is also experimenting

with ‘doughnut economics’, as successfully tested at city level in Amsterdam

(https://www.kateraworth.com/wp/wp-content/uploads/2020/04/20200416-AMS-portrait-EN-Spread-web-420x210mm.pdf).

137

https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8219,https://ec.europa.eu/jrc/en/publication/eur-scientific-and-

technical-research-reports/clean-energy-technologies-coal-regions.

138

The eco-industry comprises activities which produce goods and services to measure, prevent, limit, minimise or correct environmental

damage to water, air and soil, as well as problems related to waste, noise and eco-systems.

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increasing employment opportunities. Europe is already a leader in innovation to improve material

productivity, but company-level and systemic inefficiencies persist.

The green sector can generate millions of jobs.

The eco-industry sector has grown by 20% since

2000 and provides around 4.2 million jobs in Europe, with a turnover of more than €700 billion. A shift

to a greener economy could create 24 million new jobs globally by 2030 if the right policies are put in

place, according to the International Labour Organisation (ILO)

139

, who also predicts that 72 million

full-time jobs will be lost by 2030 due to heat stress and temperature increases.

The recovery from the COVID-19 crisis suggests that the impact of green labour policies

could be significantly larger.

Given the number of people out of work, steering recovery plans

towards the green transition could result in far more green jobs than previously thought.

Job creation due to climate change policies will contribute to more inclusive job growth,

countering trends which can exacerbate labour market inequalities, such as automation, robotics and

artificial intelligence. By 2050, employment in the electricity sector is projected to grow by 25%

140

, as

industry, transport and other services become increasingly electrified. Renewable energy jobs in the EU

are expected to reach 2.7 million or 1.3% of EU employment by 2050

141

Effective green reskilling, especially for the built-in environment and services, can protect

middle class jobs.

The same is true with remanufacturing, reuse, repair, and recycling. Also, energy

production and energy-intensive sectors such as steel, cement, car manufacturing, machinery and

chemicals will need to shift to new production processes as part of the transition, which will also require

new skills.

Strategic foresight can help explore the drivers of change and individual and

collective behaviours and assumptions about the future in a participatory way.

More immediately, it can help understand future structural shifts in the labour market as

part of the transition towards a climate-neutral society by 2050. This will help guide the

reskilling of people who have lost their jobs during the COVID-19 crisis, or who are likely to

lose their jobs due to accelerated technological change and automation. Foresight also helps

scan the horizon for new developments, including emerging technologies that could either

accelerate or disrupt the green transition. The European Green Deal and a just transition will

require the active and coordinated contribution of all of society.

3.4. The digital dimension

Digital resilience is about ensuring that the way we live, work, learn, interact, and

think in this digital age preserves and enhances human dignity, freedom, equality,

security, democracy, and other European fundamental rights and values.

This is

increasingly important as hyperconnectivity continues to accelerate, with physical-digital

integration, the Internet of Things, smart home technology, the use of big data, augmented

ILO flagship report, World employment and social

outlook 2018 ‘Greening with Jobs’.

https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8219.

141

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Feb/IRENA_Transition_jobs_2020.pdf.

139

140

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and virtual reality, machine learning, and other increasingly capable Artificial Intelligence

technologies. Digital technologies blur the distinction between the physical and virtual world,

and between humans, machines and nature, with implications for our own selves and the

policy frameworks

142

. They have been instrumental in keeping our economies and societies

running during the pandemic.

Capacities

Europe has a long and successful history of technological and societal innovation

and cooperation.

The EU is stronger when it works together with Member States, involving

regions and municipalities, academia, civil society, financial institutions, firms, and social

enterprises. Recent agreements in areas such as high-performance computing

143

and

microelectronics

144

have reaffirmed this capacity. Continuing to promote the digital

transformation of public administrations and justice systems throughout Europe is also

crucial to support this process

145

Europe has unique capacities to shape international standards on privacy and data

flows.

The European General Data Protection Regulation (GDPR) established data protection

rules for all firms and actors processing the data of individuals in the EU, offering people

more control over their personal data and benefits to businesses through a level playing

field

146

. The role of the EU as a rule-maker in the digital sphere is being reinforced through

engagement with non-EU countries that are currently adopting or modernising data

protection legislation. India has followed the example of the EU GDPR in creating a plan for

a Personal Data Protection Bill

147

. The California Consumer Privacy Act went in a similar

direction

148

. Europe now needs to continue building alliances and maximising its regulatory

power, support for structural improvements, diplomacy and finance to promote the European

digital model

149

Vulnerabilities

Sophisticated hybrid attacks by state and non-state actors threaten our

cybersecurity and democracy.

Vulnerabilities within the EU have been exploited through

a combination of cyberattacks and cybercrime that have resulted in damage to critical

infrastructure

150

. There has been a significant increase in the number of cyberattacks

reported against supercomputers, healthcare and financial systems

151

, such as hacking

sensitive research from medical organisations and pharmaceutical companies

152

. ICT threats

142

143

Online Manifesto (https://ec.europa.eu/digital-single-market/sites/digital-agenda/files/Manifesto.pdf).

https://ec.europa.eu/digital-single-market/en/eurohpc-joint-undertaking, https://eurohpc-ju.europa.eu/.

144

https://www.ipcei-me.eu/, https://ec.europa.eu/digital-single-market/en/ecsel.

145

https://ec.europa.eu/info/sites/info/files/communication-shaping-europes-digital-future-feb2020_en_4.pdf.

146

https://ec.europa.eu/info/law/law-topic/data-protection_en.

147

https://hbr.org/2019/12/how-india-plans-to-protect-consumer-data.

148

EIT Report, European Digital Infrastructure and Data Sovereignty (https://www.eitdigital.eu/fileadmin/files/2020/publications/data-

sovereignty/EIT-Digital-Data-Sovereignty-Summary-Report.pdf).

149

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_273.

150

Critical infrastructures are essential for vital societal functions, such as health, safety, security and economic or social wellbeing, whose

disruption/destruction has a significant impact (Council Directive 2008/114/EC).

151

https://www2.deloitte.com/ng/en/pages/risk/articles/covid-19-impact-cybersecurity.html.

152

Craglia, M.

et al.,

2020, Artificial Intelligence and Digital Transformation: early lessons from the COVID-19 crisis. JRC Science for Policy

Report, JRC121305.

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have also been flagged as a key source of systemic risk to electoral processes and the EU

financial system

153

. These events show a worrying acceleration towards asymmetrical virtual

crime

154

. Cybercrime, for example online dissemination of child sexual abuse material, has

also reached unprecedented heights

155

The rapidly escalating US-China technological confrontation is disrupting global

digital supply chains.

It will have a direct impact on the single market and reinforce the

need for the EU to pursue its technological sovereignty agenda and strengthen its key digital

capacities.

The digital divide between urban and rural areas is a cause for concern.

In 2019,

the coverage of Next Generation Access (NGA) networks, able to deliver download speeds of

at least 30 Mbps, increased to 86% of households. Fixed Very High Capacity networks

(VHCNs), able to provide at least gigabit connectivity, were available to 44% of households.

However, in rural areas NGA coverage stood at only 59% in 2019, while VHCNs reach just

20% of households. This confirms that more investment is needed in rural areas to close the

gap. Development of digital capacities in rural areas will considerably increase their

attractiveness.

The crisis revealed a lack of readiness in the data economy.

There was a significant

lack of almost all types of data on which models are built (such as employment, consumer

confidence, and production data), together with delays in producing data

156

. Data on stock,

production capacity, and demand for key supplies like personal protective equipment was

missing

157

, and data on cases of COVID-19 infections was collected differently throughout

Europe. This demonstrated that we still need a significant leap forward on data collection

and governance for economic and societal benefits. In turn, this calls

for a ‘European way’

of governing the use of data, not least to avoid data monopolies

158

Digital technologies and related business models, including Artificial Intelligence

(AI) and the platform economy, will impact the job market.

While the interplay

between potential job obsolescence and creation caused by AI and robotics is still unclear

159

it is evident that these and other digital technologies

160

, as well as related business models,

will change the way we work. Issues such as health, work-life balance, and safety at work

will be impacted

161

. Demand for skills in emerging technologies such as AI, high-performance

https://www.esrb.europa.eu/pub/pdf/reports/esrb.report200219_systemiccyberrisk~101a09685e.en.pdf.

The megatrend

‘changing security paradigm’

(https://ec.europa.eu/knowledge4policy/changing-security-paradigm_en) is accelerating.

155

COM(2020)605 final, EU Security Union Strategy; COM(2020)607 final, EU strategy for a more effective fight against child sexual

abuse.

156

https://www2.deloitte.com/be/en/pages/strategy-operations/articles/covid-19-and-data-economy.html.

157

The Commission set up a clearing house for medical equipment to address market failures and facilitate the timely availability of

supplies

during

the

pandemic

(https://ec.europa.eu/info/live-work-travel-eu/health/coronavirus-response/emergency-support-

instrument/covid-19-clearing-house-medical-equipment_en).

158

Duch-Brown, Martens and Mueller-Langer, 2017, The economics of ownership, access and trade in digital data, JRC Working Papers on

Digital Economy 2017-01, Joint Research Centre (https://ec.europa.eu/jrc/sites/jrcsh/files/jrc104756.pdf); Crémer, J., Y-A de Montjoye and

H. Schweitzer, 2019, Competition policy for the digital era, Report for Commissioner Vestager, European Commission.

159

https://ec.europa.eu/digital-single-market/en/news/future-work-work-future.

160

With global quantum race ongoing, the investment levels in Europe are still below those of the other major global players.

161

https://ec.europa.eu/info/sites/info/files/research_and_innovation/ege/ege_future-of-work_opinion_122018.pdf;

https://ec.europa.eu/digital-single-market/en/news/final-report-high-level-expert-group-impact-digital-transformation-eu-labour-markets.

154

153

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computing and whole-of-society cybersecurity

162

are very acute, and the problem is growing

as the offer lags behind market demand. Levels of preparedness and awareness are also

unequal across the EU.

Opportunities

The COVID-19 pandemic has accelerated hyperconnectivity

163

. There is an opportunity

to draw lessons from this real-time experience and achieve a balance between physical and

digital

interactions in the future that meets the public’s expectations. During the COVID-19

crisis, over one-third

of the EU’s labour force temporarily shifted to teleworking

arrangements

164

. Connectivity increased in all areas

165

and the spectacular rise in internet

traffic, estimated at between 10% and 30% worldwide

166

, remained even as countries

relaxed confinement measures. The total amount of data generated worldwide is estimated

to grow to around 175 billion terabytes by 2025.

Digital technologies could contribute to further advances in healthcare.

AI and high-

performance computing have the potential to accelerate the development of treatments,

vaccines and diagnostics, predict the spread of diseases and plan the distribution of medical

resources

167

. Such innovations could also be used to analyse individual health risks for

preventive medicine. Leveraging AI also brings opportunities for enhancing our defences

against cyberattacks, notably against critical infrastructure such as hospitals.

Digital technologies have enabled some continuity in training and education while

schools have been closed during the crisis.

When used properly, digital technologies can

increase the effectiveness, efficiency and inclusiveness of our education and training

systems. Strengthening the digital capacities of education and training systems and bridging

digital gaps in equipment and connectivity is key.

Addressing challenges associated with the implementation of the EU data strategy

will open up wide-ranging opportunities for Europe.

These include the promotion of

the EU data protection model, the possibility to improve data availability, reuse,

interoperability and governance, and the ability to avoid inadequate data infrastructures, as

well as rely on adequate tools that can empower individuals to exercise their rights.

Open strategic autonomy is key to develop the European digital economy.

connectivity, in combination with the Internet of Things, could boost the digitalisation of

services (e.g. energy, transport, banking, and health) and processes, reduce costs and

increase efficiency. The creation of a cloud infrastructure would be the first step to making

162

Nai Fovino I.,

et al.

(eds), 2020, Cybersecurity, our digital anchor, Science for Policy Report, Joint Research Centre

(https://ec.europa.eu/jrc/en/facts4eufuture/cybersecurity-our-digital-anchor).

163

The megatrend ‘accelerating technological change and hyperconnectivity’ (https://ec.europa.eu/knowledge4policy/accelerating-

technological-change-hyperconnectivity_en)

has accelerated.

164

https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef20058en.pdf.

165

Netflix doubled its paid subscriptions globally, with an additional 15.7 million subscribers (which is believed to be temporary) by April

2020 (https://orbi.uliege.be/bitstream/2268/247652/1/MAY-2020-_-N%C2%BA4.pdf).

166

https://www.forbes.com/sites/markbeech/2020/03/25/covid-19-pushes-up-internet-use-70-streaming-more-than-12-first-figures-

reveal/#4ba355cd3104.

167

For instance, the EU-funded consortium

Exscalate 4CoV

uses one of the world's most powerful high-performance computing platforms

to screen the potential impact of known molecules against the genomic structure of coronavirus.

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the most of data generated in Europe

168

. Concerted legislative and financial support for the

creation of a single market for data, based on the deployment of common European data

spaces, will ensure better access to data and bring benefits for the public and the growth of

the European data economy

169

Digital technologies can contribute to greening the economy.

They can optimise the

operation of utilities, mobility and transport, products, industrial processes and buildings and

other assets, leading to energy savings, pollution reduction and increased resource efficiency

by enabling the transition to a circular economy. They can also improve environmental and

risk management through early warning systems for extreme weather events, based on, for

instance, earth observation data and big data technologies. However, attention needs to be

paid to the energy consumption of data technologies and the short life span of digital devices

that makes e-waste, including critical raw materials, the fastest growing waste category

170

There is a fundamental shift to decentralised data systems brought by edge

171

and fog

172

computing, combined with the deployment and uptake of new mobile generation

technologies (e.g. 5G and 6G in the future) and low energy processors that can curb the

growing energy consumption of digital technologies by processing data closer to users,

through applications related to the Internet of Things, and by reducing network latency.

Strategic foresight can foster the human-centric shaping and appropriation of digital

technologies, as well as their effectiveness in boosting overall sustainability. This includes

anticipating how technologies could develop and ways to seize underlying and upcoming

opportunities. It also means exploring how digital technologies impact all walks of life and

bring new challenges, such as dealing with an increasing flow of information and the artificial

soliciting of human attention. It can help identify how the EU can shape global digital

standards and rules to the benefit of people and businesses while also greening the

economy. To respect fundamental rights and EU values and create the necessary trust for

citizens to uptake AI technologies, a horizontal framework on AI is needed. With foresight

and anticipation, it is possible to explore how digital technologies can effectively enable

governments to provide universal access to quality basic services, and how to make

institutions fully accountable. It can explore ways to deploy secure digital infrastructures

(high speed networks including future 6G, cloud and data) to avoid a digital divide between

regions and individuals.

https://ec.europa.eu/eurostat/statistics-

explained/index.php?title=File:Degree_of_dependence_on_cloud_computing,_by_economic_activity,_EU-

28,_2018_(%25_of_enterprises_using_the_cloud).png&oldid=415896.

169

COM(2017)9 final, Building a European Data Economy.

170

For example, people in northern Europe produced the most e-waste

–

22.4kg per person in 2019. The amount was half as much in Eastern

Europe. Europe had the highest recycling rate in 2019, at 42%, with Asia second at 12%.

(https://www.theguardian.com/environment/2020/jul/02/10bn-precious-metals-dumped-each-year-electronic-waste-un-toxic-e-waste-

polluting).

171

This brings processing close to the data source and it does not need to be sent to a remote cloud or other centralised system. By

eliminating the distance and time it takes to send data to centralised sources, it can improve the speed and performance of data transport,

as well as devices and applications on the edge.

172

This is a standard that defines how edge computing should work and it facilitates the operation of computing, storage and networking

services between end devices and cloud computing data centres. In data centres, fog is often used as a jumping-off point for edge

computing.

168

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Box 3.4: CASE STUDY - Green ICT

Are the

EU’s green and digital ambitions always complementary?

Information and

communication technologies (ICT) can fuel unsustainable consumption, but with the right policy

framework they also hold great promise for reducing energy consumption and optimising resource,

product and asset use. Digital technologies could help reduce global emissions by up to 15% through

innovative solutions in areas including energy, manufacturing, agriculture and land use, buildings,

services, transportation, and traffic management

173

. For instance, transferring and storing one gigabyte

of data through the internet uses between 3.1 kWh and 7 kWh, instead of 0.000005 kWh if done

locally

174

. This calls for the establishment of interoperable European cloud and edge infrastructures

that can accommodate large-scale

digital solutions in Europe while ensuring the EU’s technological

sovereignty.

However, digitalisation could negatively affect the environment, climate and human health

via higher production, use and disposal of electronic equipment, and data centres

175

. For example, the

energy consumption from mining bitcoins is estimated to be responsible for 0.3% of global energy

consumption. This might not sound like much, but 68.11 TWh per year is higher than the annual

consumption of Austria (64.60 TWh) and Czechia (62.34 TWh)

176

Material efficiency is an important challenge to address.

Every year, $10 billion worth of gold,

platinum and other precious metals is dumped in the growing mountain of electronic waste. Material

efficiency of digital technologies might have an even larger environmental impact than energy

efficiency.

Energy consumption of computing is growing at an unsustainable rate.

Newer generations of

wireless technologies are less energy consuming than earlier ones (e.g. 5G antennas are set to

consume less than the 4G ones

177

). However, the fact that 5G will bring denser networks and the rising

number of devices connected via 5G (e.g. connected and autonomous driving)

178

might lead to an

overall growth of energy consumption, at least in the

first years of deployment. The tech sector’s

estimated global footprint in 2020 is comparable to that of the aviation industry

179

This highlights the growing need to continue working on greening ICT.

Therefore, there is a

need to further consider ways to rapidly reverse the rising energy and material resource consumption

of Europe’s digital technologies and infrastructures while ensuring that they are available for

applications required for climate action, health, sustainability and resilience.

Greening ICT should be done within the framework of the circular economy,

including building

local material and digital ecosystems enabling innovative product designs and business models.

https://exponentialroadmap.org/wp-content/uploads/2018/09/Exponential-Climate-Action-Roadmap-September-2018.pdf.

https://medium.com/stanford-magazine/carbon-and-the-cloud-d6f481b79dfe.

175

The EU Environmental Foresight System (FORENV) cycle: Emerging issues at the environment-social interface.

176

Cambridge Bitcoin Electricity Consumption Index (https://www.cbeci.org).

177

https://www.ericsson.com/en/blog/2019/9/energy-consumption-5g-nr;

https://hellofuture.orange.com/en/5g-energy-efficiency-by-

design/.

178

AI Now Institute (https://ainowinstitute.org/AI_Now_2019_Report.pdf).

179

Data centres will make up 45% of this footprint (up from 33% in 2010) and network infrastructure 24%. See:

Belkhir and Elmeligi,

2018,

AI and Climate Change: How they’re connected, and what we can do about it (https://medium.com/@AINowInstitute/ai-and-climate-

change-how-theyre-connected-and-what-we-can-do-about-it-6aa8d0f5b32c).

174

173

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4. Strategic foresight agenda

4.1 Monitoring resilience

As resilience becomes a new compass for EU policymaking, proper monitoring tools

are required.

This Communication suggests moving towards

resilience dashboards

and co-

creating them in exploratory discussions with Member States and key stakeholders. It

presents here prototypes. The purpose of these prototypes, in view of more detailed analysis,

is to highlight vulnerabilities and resilience capacities in the EU and its Member States. These

dashboards will need further work, building on existing threads and collective intelligence.

The list of dashboard indicators will be dynamic and chosen based on a participatory process

involving Member States and key stakeholders, relying on quality data comparable across

Member States and over time.

The resilience dashboards will be complementary and will add value to other

monitoring tools.

They will draw upon existing sectoral indicators and monitoring tools,

such as the Social Scoreboard and the Monitoring report on progress towards the SDGs in an

EU context

180

. They will provide clear added value through the following specificities: (i) the

dashboards will be informed by strategic foresight, helping to identify emerging issues and

challenges and propose new forward-looking indicators of vulnerabilities or resilience

capacities; (ii) while existing tools aim to assess progress in the EU and its Member States,

for instance along the transitions or in specific sectoral policies, the dashboards will assess

resilience, i.e.

the ability

to make progress and reach policy targets; and (iii) while many

existing tools tend to be sectoral or focus on single topics or policies, the dashboards will

focus on multiple dimensions of resilience and their interlinkages, providing a holistic picture.

4.1.1 Prototype resilience dashboards

This Communication proposes to develop prototype dashboards for the social and

economic, geopolitical, green, and digital dimensions of resilience.

What is presented

below as an example is a preliminary and yet-to-be-finalised set of indicators of

vulnerabilities

and

resilience capacities

at EU and Member States level based on publicly

available data

181

The illustrative prototypes provide an example of the look and feel

of such a dashboard.

For each variable, a scale of three colours indicates the countries’

relative situation in the last year for which data is available versus the pooled values of

available data since 2007

182

. Colours are assigned based on the distance from the mean of

the underlying distribution

183

https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-02-20-202.

The complete list of indicators, corresponding definitions, and sources are available in the following technical papers of 9 September

2020

from the Commission’s Joint Research Centre (JRC): (i) ‘Prototype

dashboard for monitoring the social and economic dimension of

resilience’,

JRC121729; (ii)

‘Prototype

dashboards for monitoring the geopolitical, green, and digital dimensions of resilience’, JRC121633.

182

Data availability may vary between countries from year to year and countries with longer data series are more prominent in the

distribution. If no data is available for a variable at the beginning of the period, the 2007-2019 distribution automatically refers to the

latest available values. If variables are available only for a single year, relative performance is assessed only for that year.

183

For each indicator, the mean and standard deviation are calculated for the pooled distribution across countries and years. Yellow/blue

indicates countries that, in the latest available year, perform at least one standard deviation worse/better than the average. Light blue

refers to the intermediate range.

181

180

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The illustrative prototype dashboard for social and economic resilience looks at

social, economic, and health issues in connection with COVID-19. Figure 4.1

184

gives

a sense of relative vulnerabilities, resilience capacities, and common patterns in the EU and

its Member States. For example, in this preliminary work, population ageing and rising travel

in the pre-crisis period appear as common vulnerabilities.

Figure 4.1

–

Prototype dashboard for social and economic resilience linked to the COVID-19

crisis

The illustrative prototype dashboard for the geopolitical dimension of resilience

focuses on raw materials.

A secure supply of raw materials is a prerequisite for a resilient

economy. A prototype dashboard, presented in the top panel of

Figure 4.2

185

, has been

prepared to give a sense of Member States’

relative vulnerabilities and capacities in relation

184

Sources include Eurostat and the Commission, complemented by variables from JRC's LUISA territorial platform, the European Institute

for Gender Equality, the Global Competitiveness Index of the World Economic Forum, the World Bank, the European Quality of Life Survey,

Eurobarometer and research (https://www.eurosurveillance.org/content/10.2807/1560-7917.ES.2018.23.46.1800516).

185

The starting points are the Raw Materials Scoreboard 2018 (https://ec.europa.eu/growth/content/raw-materials-scoreboard-2018_en)

and the methodology of the criticality assessment (Blengini

et al.,

2017,

https://doi.org/10.2760/73303).

Sources include the Commission,

the World Mining Database, the British Geological Survey’s World Mineral Production database, and the US Geological Survey’s

historical

statistics.

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to raw materials supply. At this stage, there is no possibility to reflect the economic structure

of individual Member States in the prototype, which is a significant limitation. Nevertheless,

as an example, the dashboard indicates that many countries fare well in relative terms with

respect to import dependence of base metals, but less so to import dependence of non-

metallic minerals for construction

186

. Among capacities, the spending on innovation in

material sectors is a strong point in many countries.

Figure 4.2

–

Prototype dashboards for the geopolitical, green, and digital dimensions of

resilience

The illustrative prototype dashboard for the green dimension of resilience focuses

on climate change and the environment.

It is presented in the middle panel of

Figure

4.2

187

. In this illustrative example, indicators like the share of population covered by the

Covenant of Mayors and the size of Natura 2000 protected areas provide a relatively positive

picture for many countries. By contrast, water exploitation, biodiversity loss, greenhouse gas

186

187

In absolute terms, however, import dependence of base metals is higher than for non-metallic minerals.

The starting point is the index of the EU Global Climate Change Alliance (Miola

et al.,

2015,

https://doi.org/10.2788/516387),

complemented with additional variables describing Member States’ efforts and achievements towards climate adaptation and mitigation.

Data sources include the World Bank, the FAO, the European Environmental Agency, and the Emergency Events Database of the Centre for

Research on the Epidemiology of Disasters (EM-DAT), the data collections of various research institutions, Eurobarometer and Eurostat.

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absorption by ecosystems, public expenditure on environmental protection and the frequency

and fatality of floods, storms and wildfires highlight potential weaknesses.

A digital resilience dashboard could be further developed starting from the Digital

Economy and Society Index (DESI).

The bottom panel of

Figure 4.2

presents a set of

DESI indicators of digital resilience capacities, like e-governance and digital skills. They are

complemented with others whose importance was highlighted by the COVID-19 crisis, like

teleworking and e-health. According to these indicators, many countries show strong

capacities in e-government and the overall digital economy reflecting improving penetration

and adoption of new technologies. At the same time, digital skills, teleworking capacities and

the use of e-health show a more contrasted picture.

4.1.2 Work ahead for monitoring resilience

The prototype dashboards are presented as an example. In cooperation with

Member States and other key stakeholders, the Commission will develop the

resilience dashboards further in a forward-looking perspective.

The dashboards will

be informed by strategic foresight, which can help identify emerging challenges and propose

new forward-looking indicators to assess vulnerabilities or capacities. As resilience is a

characteristic that must be enhanced over time, the focus of this work will be on the medium-

to-long term, to give the best conditions for foresight-informed policies to mitigate

vulnerabilities and strengthen capacities. This will take into account the impact of

megatrends and anticipated risks. For instance, the dashboard for social and economic

resilience would be broadened beyond the COVID-19 context, in close connection with the

Social Scoreboard. Moreover, broader issues such as trade, including value chains, security,

and other aspects of foreign policy such as international cooperation could be considered for

a more comprehensive geopolitical dashboard. For the green resilience dashboard, issues

beyond climate change, such as the preservation of natural resources, the impact of

pollution, water and soil quality, the role of ecosystem services or job reallocation and

innovation prompted by the green transition, could also be contemplated. The utmost

attention will be paid to ensure consistency and coherence with existing EU monitoring

systems under development in the context of the European Green Deal. A digital resilience

dashboard should be used to identify digital technology areas where the strategic autonomy

of the EU is at risk and where investments should be targeted. In addition, strategic foresight

could be used to adjust the list of indicators to include for instance necessary skills or

vulnerabilities linked to the widespread use of future technologies such as AI

188

, the number

of jobs at risk as a result of increasing automation, or new jobs that could be created by the

implied shift towards personal services.

Aggregate indicators at EU level and a synthetic resilience index could also be

envisaged.

Building on the resilience dashboards, as well as existing knowledge and

indicators, future discussions with key stakeholders will aim to develop these indicators at

A leading source is the Commission’s

AI Watch

initiative (https://ec.europa.eu/knowledge4policy/ai-watch_en), monitoring industrial,

technological and research capacity, uptake and technical development of Artificial Intelligence and its impact on the economy and society.

188

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EU level and explore the feasibility of a synthetic resilience index. Its rationale would be

similar to the logic underlying the work on the forthcoming

Transition Performance Index

189

This exploratory work could follow a participatory process. An EU-wide approach, combined

with the snapshot provided by the index, would complement the more comprehensive view

provided by the underlying resilience dashboards.

This broad approach to measuring and monitoring resilience should feed into an

integrated approach to measuring people’s wellbeing.

The COVID-19 crisis has called

into question our ordering of priorities and reignited the public debate on the importance of

many aspects of the quality and sustainability of human life, such as education, income, jobs

and health

190

. Since the 2007 Istanbul Declaration on Measuring Social Progress and the

2009 report of the Stiglitz-Sen-Fitoussi Commission, there has been a strong consensus in

the international community on the need to go beyond conventional economic measures like

gross domestic product (GDP), to make wellbeing a policy target for the generation of today

as well as tomorrow

191,192

. The ‘Beyond GDP’ initiative has led to the creation of major

international measurement frameworks

193

and efforts by countries to develop similar,

sometimes highly elaborate systems of national objectives, targets and measurement

schemes. The Commission supports this paradigm shift and takes a similarly comprehensive

approach, acknowledging the complex interaction among social, economic and

environmental systems influencing resilience and its importance for measuring wellbeing

and sustainability

194

4.2 Horizontal foresight activities to foster effective EU

transition-led policies

Strategic foresight will be applied to bring a dynamic and forward-looking

perspective of synergies and trade-offs among various EU policy goals and

policies, leading to a coherent strategic approach.

This can provide relevant input for

surveillance and governance processes, particularly multidisciplinary and periodic ones like

the European Semester and SDGs monitoring. By supporting a systemic understanding of

the strategic objectives across policy areas, strategic foresight can be used to provide a

dynamic analysis of synergies and trade-offs between them and across time horizons.

Strategic foresight should contribute to testing and strengthening the coherence of the

The Commission is exploring the possibility of measuring the transition to sustainability by way of a scoreboard. Based on the annual

monitoring reports from Eurostat, this scoreboard would provide an internationally comparable overview of all four dimensions of

sustainability (economic, environmental, social and institutional), with the aim of encouraging a broad public debate throughout the EU.

190

Gadredy, J., Jany-Catrice, F.,

et al.,

2020, Se libérer du PIB pour mesurer ce qui compte vraiment, Le Monde.

191

See: the first Stiglitz-Sen-Fitoussi Report from 2009 (https://ec.europa.eu/eurostat/documents/8131721/8131772/Stiglitz-Sen-Fitoussi-

Commission-report.pdf);

COM(2009)433 final, GDP and beyond: measuring progress in a changing world; SWD(2013)303 final, Progress

on ‘GDP and beyond’ actions;

and the two volumes of the second Stiglitz-Fitoussi-Durand report from 2018

(https://doi.org/10.1787/9789264307292-en and

https://doi.org/10.1787/9789264307278-en).

192

The high-level

conference ‘Beyond GDP’, hosted by the

Commission, the European Parliament, the Club of Rome, the OECD and the

WWF in 2007 focused attention on the most appropriate indices to measure progress, and how these can best be integrated into the

decision-making process. Méda, D., 2020, Promouvoir de

nouveaux indicateurs de richesse: ‘histoire d’une cause inaboutie’, Fondation

maison des sciences de l’homme, Coll ge d’ tudes mondiales; and Durand, M. and Exton, C., 2019, Adopting a Well-Being

Approach in

Central Government: Policy Mechanisms and Practical Tools, Chapter 8 of the Global Happiness and Wellbeing Policy Report, OECD.

193

Leading examples are the OECD Better Life Index and the United Nations’ Sustainable Development Goals and Human Development

Index.

194

De Smedt, M., Giovannini, E. and Radermacher, W.J., 2018, Chapter 9: Measuring sustainability, in Stiglitz J.E., Fitoussi Jean-Paul, Durand

Martine (Eds.), 2018, For Good Measure: Advancing Research on Well-being Metrics Beyond GDP, OECD Publishing, Paris, pp. 241-276,

(https://doi.org/10.1787/9789264307278-11-en).

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Commission’s monitoring, forecasting and modelling capacities.

Currently, different

indicators and scoreboards are used across the Commission to serve various policy goals.

The Commission also relies on expert-based forecasts and a wide range of models. A review

and assessment of existing monitoring tools could identify where and how coherence can be

improved.

Strategic foresight will help enhance resilience.

This Communication starts to show

how the impact of COVID-19

on megatrends can shed a new dynamic light on Europe’s

evolving resilience. Work will continue on this forward-looking task. As part of this, the

Commission is proposing to develop a set of shared

reference foresight scenarios

as a

robust forward-looking framework. These scenarios will help identify potential pathways for

the twin transition.

They

will: (i) provide a reference for debating shared or alternative visions

of preferred futures amongst leaders; (ii) help ensure coherence across policies; and (iii)

serve as a common forward-looking framework for stress-testing policy proposals or

launching

ex ante

impact assessments. This exercise can also contribute to the Conference

on the Future of Europe.

4.3 Thematic strategic foresight agenda

The EU strategic foresight agenda will address cross-cutting topics where

strategic foresight can deepen our understanding of the dynamics at play across

policy tracks.

Among the high-impact topics identified, the Commission will next explore:



Open strategic autonomy:

to secure Europe’s competitiveness and global

leadership in the future and strengthen its resilience, strategic foresight could help

explore scenarios for a new global order and the EU’s place in it, as well as the

capacities needed to match its ambitions. This could include defining pathways for

achieving the twin transitions and the pace with which they can be achieved, mapping

critical emerging technologies, sectors and products, and options for new industrial

alliances and diversification of trading partners. In this context, foresight could

inter

alia

allow horizon scanning, including as regards international standardisation, to be

used as a strategic lever by the EU. Possible future work on this topic would also need

to be seen in light of the forthcoming review of the EU’s trade policy that will identify

its contribution to open strategic autonomy.



The future of jobs and skills for and in the green transition:

As acknowledged

in the European Skills Agenda, the green transition requires a major shift and

reallocation of jobs and skills, in a wide range of sectors and public services. A

systemic view of the shifts in the labour market driven by the green transition is still

missing. Foresight could explore the means by which such a systemic view could be

developed, integrating also the lessons that can be learned from previous industrial

transitions. Such a view will inform the strategies for reskilling and accompanying

people, whose jobs are transformed or lost due to the industrial transition. This is

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also important to guide the

EU’s future priorities for education, lifelong learning and

legal migration pathways, as well as to ensure a just transition.



Deepening the twinning of the digital and green transitions:

the digitalisation

of our society and the green transition are happening concurrently and are intimately

related. However, their interactions need to be better understood and exploited.

Strategic foresight will explore how emerging technologies can make the most of

both transitions, how they relate to each other, and how, for instance, the

environmental impact of the digital transition can be reduced. It will also explore the

skills required to exploit the technologies of the future, the ways in which AI can be

deployed to transform our digital economy and facilitate the green transition, and

the associated impacts on European actors and value chains. In addition, it will

analyse ways in which investment in strategic projects, including as part of the

recovery, can benefit both the green and digital transitions.