Territorial challenges for the future of Europe in the eye of the new crisis

A flagship ESPON project, the European Territorial Reference Framework (ETRF) had identified almost a year ago the main trends affecting the European territories. These trends were influenced by the outcomes of the financial, economic, and institutional crisis that started in 2008. But the project was also noting that "there are different possible futures for Europe, to some extent influenced by proactive and reactive policymaking. However, exogenous trends, outside the influence of policymakers, can alter the course of European society".

It is interesting to see that many of the new uncertainties the pandemic crisis of COVID19 creates today can be still understood and categorized -if adjusted accordingly- under these trends. This creates already a strong basis for the decision-makers that will need to deal with the effects of this crisis in designing their new development policies. 

More Fluid societies

Population ageing is a characteristic of more advanced countries, thanks to healthier living and better healthcare. The over-80s age group is expected to amount to 13% in 2080. This increases the pressure on European welfare systems which have to increase expenditure in pensions and elderly care while relying on a reduced workforce. Nonetheless, the ‘silver economy’ can create opportunities for new businesses and products.

While at the global level the population living in poverty has reduced, disparities within some European countries have been increasing. Similarly, differences between cities, and even within cities, may become a growing concern. Those who can embrace technological and industrial change may thrive, while others may not be able to maintain current levels of prosperity. While Europe will likely attract migrants from elsewhere (e.g. from fast population-growing African countries), attractive production centres outside of Europe may draw away many European talents.

Accordingly, different groups of society and different communities are likely to be differently affected by technological, economic and environmental changes, with some being better off and others being worse off.

Education systems are likely to come under pressure as well, and their ability to adapt to changes will prove fundamental for success. Not only  will it be necessary that new generations are taught new skills, but also life-long learning and (re)training of the existing workforce will be necessary to keep up with technological change

Networked economies

As has been the case for years, economic growth will continue to develop faster in emerging countries than in more advanced ones, like Europe. Some EU countries are likely to continue to feel the weight of the economic and financial crisis, especially concerning the level of public debt. This is likely to remain elevated in many countries, and diversity among the member states will continue to exist.

The difference between services and industry will be less clear, under the influence of new technologies affecting both fields. Collaborative and ‘sharing’ economies will likely be further developed both at local and global scale. On the one hand this might increase the customisation of products and better address customers’ requests, on the other it may pose a challenge to labour regulation and worker’s rights.

In the long term global trade will likely become more relevant than European trade, as high growth in emerging economies will make them an increasingly important destination for European exports. In the short term however, there is the possibility of increasing ‘protectionist’ measures that may hamper international trade, e.g. with the US. At the same time, increasing interconnectedness among countries and regions, as well as stronger economic interdependencies and participation in global value chains is likely to take place.

Singular technologies

Digitalisation, automation, artificial intelligence, data mining and processing have already started to shape  European society and economy, and their effects will continue to be felt in the future. These ground-breaking changes have a disruptive impact on many dimensions, including industry, work organisation, business models, health and education systems, as well as public and private services.

New technologies may have contradictory impacts. For example, the use of the internet can be empowering and give people freedom, while at the same time raise concerns for privacy and data sharing. Digitalisation can reduce geographic distances and increase ‘virtual’ proximity, increasing the connectedness of remote places and allowing remote-working.

At the same time, it can lead to the centralisation of activities in some places (e.g. business districts and innovation clusters) as well as the creation of global, digital monopolies. Global businesses are likely to continue to emerge, although with the possibility of being based ‘multilocally’, i.e. in a variety of interconnected, potentially remote locations.

Environmental risks and assets

Awareness of the environmental impacts of human activity will likely increase and result in more environmentally-friendly policymaking. Nonetheless, such awareness and proactive policies may vary across regions, since different places are affected differently by climate change – with varying levels of risk.

Environmental concerns linked to risks and assets will have major spatial implications, in Europe as well as in other countries, including the decarbonisation of industrial activities, different modes of energy production, and radical changes to transport and heating systems. Concerns about the loss of biodiversity, as well as habitat destruction, and the transition towards a circular economy will create not only challenges to a successful transformation but also opportunities for growth and the emergence of new sectors of economic activity.

Overall, it is expected that better technologies and more responsible human behaviour will lead to lower environmental impacts in Europe, assuming that environmental regulations and public policies will induce this positive trend.

Find out more about the ETRF project and read the final report on the page of the project