New Study of Global Societal Trends to 2030 Says That Europe Must Focus on Socio-Economic Health, Not Wealth, of Its Nations

For Release

Wednesday
December 18, 2013

Investing in citizens, preparing for a new growth paradigm and reinventing government are the tasks that lie ahead for the incoming European Commission and newly elected MEPs in 2014, to ensure Europe is resilient in the face of global societal trends in the next two decades, according to a new report launched today by RAND Europe.

“We observe a trend of rising inequality between citizens in the EU, which is at odds with one of the Union's core values,” said Stijn Hoorens, lead author of the study and project leader at RAND Europe in Brussels. “The EU is expected to enter an era of long-term slow economic growth. Therefore, it cannot rely on productivity growth as the engine for well-being in the coming decades.”

The report, “Europe's Societal Challenges: An analysis of global societal trends to 2030 and their impact on the EU,” was jointly commissioned by the European Commission, Parliament, Council and the External Action Service. The report will help the incoming European Commission to set the long-term priorities for the EU's social agenda.

Global societal trends and their impact on Europe were clustered into four themes, listed below with examples of key messages:

1. A new demographic reality

  • Demographic deficit could lead to stagnation of economic output
  • Rise of age-related expenditures
  • A pressure on systems based on intergenerational solidarity
  • An opportunity for innovative grass roots alternatives to public service provision

2. A new global consumer class

  • Income inequalities between countries are decreasing, but within-country inequality is rising
  • Global population and income growth will be driven by low- and middle-income countries
  • Income growth is concentrated in the middle and higher income groups, but highly sensitive to the economic climate
  • As the global population increases and the middle class expands worldwide, demand for food and natural resources could be strained further
  • Claims that the rise of a new consumer class will lead to a convergence in people's values do not appear to be well supported by evidence

3. Individual empowerment

  • New technologies and media may also drive individual empowerment
  • Internet has become a proxy for freedom of opinion
  • Positive correlation between Internet penetration and democratic reform
  • No clear indication of translation from online activism to offline participation
  • Trust in institutions has declined, challenging their legitimacy

4. Rising inequality and vulnerable groups

  • Differences in labour market outcomes of low- and high-skilled workers seem to be growing
  • Increased demand for specialised skills in IT, science, engineering and technology
  • Potential specific skills shortages in softer sectors, such as health, mental or social care
  • After decades of improvements, the population at risk of poverty is growing, income inequality is increasing and structural unemployment is on the rise for specific groups
  • There is a cohort of young people at risk of becoming a lost generation
  • An increasing proportion of household structures that are more vulnerable to poverty

The three long-term tasks for the incoming European Commission are therefore:

  • Investing in citizens: Equipping EU citizens with the tools to seize opportunities and protecting the most vulnerable.
  • Preparing for a new growth paradigm: Focus on wellbeing of citizens and enable business to reap economic opportunities and compete globally.
  • Reinventing government: Recalibrating the public sector to accommodate the realities of the 21st century.

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RAND Europe is an independent not-for-profit research institute whose mission is to help improve policy and decisionmaking through research and analysis.

Project background and methods: The research was based on analysis of available literature and data and an online consultation with more than 400 experts.

Further information: Europe's Societal Challenges on the RAND website: www.randeurope.org/espas

Please contact cobrien@rand.org if you would like a copy of the report.

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