2021 strategic foresight report : the EU’s capacity and freedom to act.
Date: 2023-05-08
Institutions: Secretariat-General
Subjects: EU policy, foresight, report, the EU's international role

2021
STRATEGIC 
FORESIGHT 
REPORT
The EU’s capacity and 
freedom to act

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CONTACT
Unit A.5 Foresight & Strategic Communication
Secretariat General, European Commission, Brussels, Belgium 
SG-FORESIGHT@ec.europa.eu

https://ec.europa.eu/info/strategy/strategic-planning/strategic-foresight_en

CREDITS
cover illustration: Earth by ESA astronaut Alexander Gerst © ESA/NASA, 
Graham Holtshausen and Guille Pozzi on Unsplash

page 4: Photo by David Marcu on Unsplash 
page 6: © Alfred Wegener Institute
page 12: Photo by Raj Rana on Unsplash
page 16: Photo by K. Mitch Hodge on Unsplash
page 26: Photo by Lacas Sandor on Unsplash 
page 30: Photo by Simon Berger on Unsplash 

CONTENTS 

1. INTRODUCTION

2.  KEY GLOBAL TRENDS

1.
2.
3.
4.

Climate change and other environmental challenges
Digital hyperconnectivity and technological transformations
Pressure on democratic models of governance and values
Shifts in the global order and demography

3.  FACING CHALLENGES AND SEIZING OPPORTUNITIES

FOR THE EU’S GLOBAL LEADERSHIP

1.
2.
3.

4.
5.
6.
7.
8.

Ensuring sustainable and resilient health and food systems
Securing decarbonised and affordable energy
Strengthening capacity in data management,
artificial intelligence and cutting edge technologies
Securing and diversifying supply of critical raw materials
Ensuring first-mover global position in standard-setting
Building resilient and future-proof economic and financial systems
Developing and retaining skills and talents matching EU ambitions
 Strengthening security and defence capacities
and access to space

9. Working with global partners to promote peace,

security and prosperity for all

10. Strengthening the resilience of institutions

4. SETTING THE STAGE FOR TOMORROW’S POLICIES

ENDNOTES 

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KA-08-21-262-EN-N

ISBN 
ISBN 

978-92-76-41138-3
978-92-76-41139-0

10.2792/697694
10.2792/55981

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INTRODUCTION

1

The European Union is charting a strategic path to becoming the first climate-neutral continent by 2050, 

grasping the opportunities of the digital age, building an economy that works for people, promoting the 

European  way  of  life,  strengthening  our  unique  brand  of  responsible  global  leadership,  and  nurturing, 

protecting and strengthening our democracy.

Openness,  as  well  as  rules-based  international  and  multilateral  cooperation,  are  strategic 

choices.  They  stimulate  prosperity,  fairness,  stability,  competitiveness  and  dynamism  within 
the EU and beyond. The history of the European project demonstrates the benefits of well-managed 
interdependence and open strategic autonomy based on shared values, cohesion, strong multilateral 
governance and rules-based cooperation. The pandemic has only strengthened the case for international 

cooperation to address global challenges.

This  2021  Strategic  Foresight  Report  presents  a  forward-looking  and  multi-disciplinary 
perspective on the EU’s capacity and freedom to act in the coming decades. Based on an expert-
led, cross-sectoral foresight process1, it presents global trends, uncertainties and choices that will shape 
Europe’s future. The report provides the context for possible policy responses. It builds on the 2020 Strategic 
Foresight Report2, which introduced resilience as a new compass for EU policymaking.

Section II identifies important structural global trends towards 2050 that will affect the EU’s capacity 
and freedom to act: climate change and other environmental challenges; digital hyperconnectivity and 
technological transformations; pressure on democracy and values; shifts in the global order and demography. 
Section III sets out ten areas in which the EU could strengthen its open strategic autonomy and 
global leadership. The report stresses that the EU’s future capacity and freedom to act will depend on 
whether the EU is able to make ambitious choices today, guided by its values and interests, across the 

identified policy areas.

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KEY GLOBAL TRENDS

2

CLIMATE CHANGE AND  
OTHER ENVIRONMENTAL  
CHALLENGES

PRESSURE ON DEMOCRATIC 
MODELS OF GOVERNANCE 
AND VALUES 

DIGITAL 
HYPERCONNECTIVITY 
AND TECHNOLOGICAL 
TRANSFORMATIONS

SHIFTS IN THE GLOBAL ORDER 
AND DEMOGRAPHY

1. Climate change and  other environmental challenges

Climate change has already impacted every region on Earth in unprecedented and irreversible 
ways3.  On  the  current  trajectory,  global  warming  will  likely  surpass  1.5°C  in  the  next  two  decades  and 
head towards 2°C by 20504. The first single year of global temperature at this level could already occur 
in the next five years. Every additional 0.5°C will increase the intensity and frequency of extreme weather 

events, droughts, wildfires or floods, including in locations where this was uncommon in the past. Rising 

temperatures  also  mean  more  ice  melting  and  higher  sea  levels.  These  changes  will  have  significant 

consequences for the environment, health, food and water security, and human safety and development. 

Over  the  past  decade,  weather-related  events  have  triggered  an  estimated  displacement  of  around  23 

million people on average each year, and the migration pressures will only increase. By 2050, over 200 
million people could need humanitarian assistance every year partly due to climate-related disasters5.

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Pressure  on  water  and  food  security  will  continue  to  grow.  Parts  of  Europe  are  already  under 
medium-to-high  water  stress  levels  (Figure  1),  and  this  is  set  to  increase  over  time.  Water  scarcity  will 

become particularly problematic in the southern EU neighbourhood, potentially aggravating conflicts and 

pressure on migration. This issue can also affect the EU indirectly, through food insecurity and price shocks. 
Over 40% of the EU’s agricultural imports could become highly vulnerable to drought by 20506, inducing 
competition for water and fertile land. Overall, the impact of droughts on EU’s economy could reach over 
EUR 65 billion a year by 21007. The agricultural activity zones will not move northwards, given that higher 
average  temperatures  in  Northern  Europe  will  be  accompanied  by  the  risk  of  increased  cold  waves 

caused by a weakened Gulf Stream. 

Environmental challenges extend well beyond climate change, with a particularly alarming 
situation  regarding  biodiversity  loss  and  change  in  the  nitrogen  cycle.  The  EU’s  natural 
ecosystems are under cumulative pressures not only from climate change, but also from pollution, 

land use, resource extraction, invasive species and the loss of pollinators. Moreover, human activities 

have  substantially  changed  the  nitrogen  cycle,  mainly  due  to  its  agricultural  use.  The  scale  of 

Administrative

this  change  is  far  greater  than  the  modification  of  the  carbon  cycle  resulting  from  greenhouse 
gas  emissions9.  This  affects  freshwater,  coastal  areas  and  human  health.  Such  environmental 
challenges have economic consequences often overlooked: an estimated EUR 3.5-18.5 trillion per 

Country borders
EU borders

year in ecosystem services from 1997 to 2011 were lost globally owing to land- cover change, 
Freshwater withdrawal as a portion of available
and an estimated loss of EUR 5.5-10.5 trillion per year due to land degradation10.
freshwater resources (%) *

There  is  an  important  interlinkage  between  climate  change,  biodiversity  loss, 
environmental  degradation  and  public  health.  Loss  of  biodiversity,  pressure  on  animal 
habitats, the excessive use of antibiotics, risks relating to biological research of highly pathogenic 

75 - 100

25 - 50

> 100

50 - 75

0 - 25

FIGURE 1: WATER STRESS, CONFLICTS AND MIGRATION8

Administrative

Country borders
EU borders

Freshwater withdrawal as a portion of available
freshwater resources (%) *

0 - 25

25 - 50

50 - 75

75 - 100

> 100

Migration ﬂows

By land and sea

Security incidents ﬁrst half of 2021**

1 - 30

31 - 100

101 - 600

601 - 2000

2001 - 6000

* © 2021  EC, DG Joint Research Centre, Unit D2

**Armed Conflict Location & Event Data Project,
event types included: battles, explosions/remote 
violence, violence against civilians

Production Date: 13 Aug 2021
Contact point: JRC-science4peace@ec.europa.eu

Source data: JRC, GADM, 
IOM, ACLED

microbes, unhealthy lifestyles – all these factors make future pandemics or diseases more 

likely. The results will affect humans, major food crops and animal health. Challenges include 

Migration ﬂows

infectious diseases, advanced antimicrobial resistance, non- communicable diseases (cancer, 

By land and sea

diabetes or obesity), and mental health problems. In addition, with climate change certain 
diseases (malaria or dengue) will become more prevalent further north11.

Security incidents ﬁrst half of 2021**

1 - 30

31 - 100

101 - 600

601 - 2000

2001 - 6000

* © 2021  EC, DG Joint Research Centre, Unit D2

**Armed Conflict Location & Event Data Project,
event types included: battles, explosions/remote 
violence, violence against civilians

Production Date: 13 Aug 2021
Contact point: JRC-science4peace@ec.europa.eu

Source data: JRC, GADM, 
IOM, ACLED

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 2. Digital hyperconnectivity and technological transformations

3. Pressure on democratic models of governance and values 

To be technologically and digitally sovereign, the EU will need to support the development and uptake of human-
centred knowledge and technologies. The EU is a strong player in terms of knowledge and innovation: it accounts for 
almost  20%  of  the  world’s  total  research  and  development,  publications  and  patenting  activity12.  However,  it  lags  behind 
global competitors in private investment into research and other indicators. The EU has a performance gap with Australia, 

Canada, Japan, South Korea and the United States. Since 2014, its position improved to Australia, Canada, Brazil, India, Russia 

and South Africa but worsened to Japan, South Korea, the USA and China.

Despite  the  uncertainty  accompanying  emerging  technologies,  it  is  clear  that  a  number  of  breakthrough 
innovations can be key for the twin transitions and competitiveness13. The EU is a technological champion in advanced 
manufacturing and materials, with its firms delivering many critical enablers to global production lines. It is a leader in future 

The EU is the largest group of democracies in the world, but democratic governance is declining globally. 2020 was 
the 15th consecutive year of a decline in political rights and civil liberties at a global level23, exacerbated by the coronavirus 
pandemic in many regions. 34% of the world’s population lives in countries where democratic governance is declining and 
only  4%  lives  in  countries  that  are  becoming  more  democratic24.  Geopolitical  contestation25,  inter-state  polarisation  and 
tensions are likely to persist in the coming decades. If the ongoing erosion of democratic governance continues, it will affect 

both established and emerging democracies. The long-term performance of democratic systems hinges on their capacities to 

adapt to new realities and to remain resilient to internal and external challenges.

Zones  of  instability  and  conflict  close  to  the  EU  and  beyond  are  likely  to  persist  and  may  even  grow.  Both 
state and non-state actors are likely to strengthen their hybrid tools, including the use of disruptive technologies, spread of 

smart  and  sustainable  mobility  and  low-carbon  technologies.  The  EU’s  capabilities  in  artificial  intelligence,  big  data  and 

disinformation and misinformation, information operations and both military and non-military influence. Repression of freedoms 

and democratic reforms, as well as continued instability in countries and regions in near and further EU neighbourhood, like 

Afghanistan or Syria, will continue to have an impact on migratory pressure.

Large-scale  disinformation,  powered  by  new  tools  and  online  platforms,  will  pose  increasing  challenges  to 
democratic  systems  and  drive  a  new  type  of  information  warfare.  Countries,  organised  crime  groups,  businesses 
or individuals use these solutions to spread disinformation globally or gain competitive advantages. This could threaten our 

democracies, polarise debates, and put health, security and the environment at risk.

robotics are similar to Japan’s, but it needs to catch up with leaders: the USA and China. In key quantum technologies, the 
USA, Japan and China are currently in the lead14. By 2025, the EU will have its first computer with quantum acceleration and 
if matched with investment, it could be at the cutting edge of quantum capabilities by 203015.

Other  promising  technologies  include  microelectronics,  new  materials  for  bio-degradable  electronics,  flexible  and  printed 

electronics, and 2D material based technologies such as graphene. Moreover, many pilot technologies have high decarbonisation 

potential. These include clean hydrogen, low carbon fuels, carbon capture and storage/usage, next-generation sustainable 
batteries,  bio-based  technologies  and  materials,  methane16  cracking,  high  temperature  superconductivity,  advanced 
geothermal and ocean energy, high altitude wind energy generation, and advanced fusion-based nuclear reactors17. Various 
nature-based solutions, like large-scale reforestation also have major potential in this context.

Beyond specific technologies, hyperconnectivity is driving the transformation. It results in an increased convergence 
of industries, products, technologies and services. The number of connected devices globally might increase from 30.4 billion 

in 2020 to 200 billion in 2030. Increased connectivity of objects, places and people will result in new products, services, 

business  models,  life  and  work  patterns.  At  the  same  time,  it  results  in  the  increased  risk  of  cyber-attacks  and  network 

outages, in both digital and physical world, e.g. essential infrastructures like pipelines and hospitals. It might also increase 

the threat of intellectual property and data loss and theft. Hyperconnectivity has only accelerated with the pandemic and its 
social impact needs to be carefully monitored.

However, new technologies and hyperconnectivity do not come without challenges. Certain jobs will be lost with 
automation18. Just in the EU in 2018, about 14% of adult workers were found to face a very high risks of automation19. In 
the future, 50% of current jobs globally could be automated20, with significant differences across countries and sectors21. 
New jobs will appear, but will require new skills. If left unaddressed, these trends might lead to the erosion of fundamental 

social rights, and increased inequalities and dependencies within and between states. Moreover, digital transition can increase 
e-waste, and drive demands for energy or use of rare resources22.

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KEY GLOBAL TRENDS

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4. Shifts in the global order and demography 

The world’s population will reach 8.5 billion in 2030 and 9.7 billion in 2050. Population growth 
will be uneven. It will stagnate in many advanced economies. The EU’s population is expected to fall to just 

over 420 million, a 4.3% share of the global population. In Asia, the 2040s could represent an inflection 

point, after which populations are expected first to level out and then begin decreasing around mid-century, 
with East Asia experiencing rapid demographic decline26. Africa’s population is projected to expand from 1.2 
billion to 1.8 billion between 2017 and 2035 – when about half of the population would be under the age 

of 21. In 2050, India, China, Nigeria, the USA and Pakistan will be the most populated countries (Figure 2). 

Demographic growth will influence geopolitical ambitions, but may also create sustainability or migration 

challenges. By 2050, the working age population will diminish by about 16% in Europe and 17% in China, 
while it will grow in North America and India27. The projected median age of the EU population will rise from 
43.9 in 2020 to 48.2 years by 2050. Sharp rises in total-age dependency ratios28 are projected for many 
EU areas. If this trend continues, by 2050 there may be 135 dependent non-workers for every 100 workers 
in the EU29.

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KEY GLOBAL TRENDS

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EU-27

USA

CHINA

GLOBAL POPULATION
UKTURKEY

RUSSIA

JAPAN

INDIA

INDONESIA
BRAZIL

BANGLADESH
PHILIPPINES
PAKISTAN
ETHIOPIA
NIGERIA
MEXICO
EGYPT

REST OF  
THE WORLD

GLOBAL GDP

EU-27

USA

JAPAN
CHINA
INDIA

RUSSIA

INDONESIA
UK TURKEY
BRAZIL
MEXICO

THE WORLD
REST OF

YEAR

1990

2020

2050

%

10

20

30

40

50

60

70

80

90

100

%

10

20

30

40

50

60

70

80

90

100

YEAR

1990

2019

2050

%

10

20

30

40

50

60

70

80

90

100

%

10

20

30

40

50

60

70

80

90

100

FIGURE 2: PROJECTED SHARES OF GLOBAL POPULATION30

FIGURE 3: PROJECTED SHARES OF GLOBAL GDP34

The coming decades will be marked by an increasing redistribution of global power, with its geo-economic centre 
of gravity shifting eastwards31. The G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, the USA) 
currently represent around 40% of global GDP, down from over 60% in 197532. The economic weight of the ‘emerging 7’ 
(Brazil China, India, Indonesia, Mexico, Russia, Turkey) equates around two-thirds of the G7’s. This ratio will reverse in the 

period to 2050. China is set to become the biggest economy before the end of this decade, with India possibly surpassing the 

EU in the next 20 years (Figure 3). At the same time, GDP growth in emerging and developing countries does not necessarily 
translate into a better quality of life for their citizens, including for countries with high GDP per capita33. Increased inequalities, 
lower environmental and labour standards remain key challenges for emerging economies.

Global rivalry and fragility are likely to increase. The USA-China competition could become a defining feature of the 
geopolitical landscape. The energy transition will further contribute to the redistribution of power. Fossil fuel exporters with the 

least diversified economies and/or the weakest institutions stand to be the most affected. On the other hand, countries with a 

large capacity to generate and export renewable energy will gain influence. The EU can expect continued tensions and adverse 

competition (including from China and Russia), requiring robust policies to project stability and prosperity, particularly in its 

neighbourhood. New tensions could arise from competition in contested areas, such as space or the Arctic. Increasing threats 

from organised crime, corruption, extremism, terrorism, and hybrid threats, including the instrumentalisation of migration for 

political purposes, could increasingly threaten EU security.

Multi-dimensional competition and deep interdependencies are likely to be defining features of an increasingly 
multipolar global order. Global governance and infrastructure is at risk of fragmentation due to intensified rivalries in a 
range of areas. More diverse and assertive actors with increasing capacities and aspirations are likely to appear. This includes 

non- and intra-state actors, as well as transnational movements. While no single player will be in a position to dominate all 
regions and policy domains35, strategic dependencies and capacities will continue emerging and evolving.

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KEY GLOBAL TRENDS

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27.418.311.326.422.914.820.412.81.6171.43.316.422.117.716.818.514.44.77.95.74.33.94.2FACING CHALLENGES AND SEIZING OPPORTUNITIES  
FOR THE EU’S GLOBAL LEADERSHIP

3

1. Ensuring sustainable and resilient health and food systems 

The EU’s healthcare systems are among the most advanced in the world36, but their sustainability 
and resilience need to increase. This includes investments in innovative care models (e.g. integrated 
care,  telemedicine),  strengthening  the  healthcare  workforce,  focusing  on  preventive  measures  and 

addressing comorbidity. To ensure healthier ageing, healthier lifestyles and physical activity will have to be 

combined with smart alternatives to long-term care, such as remote medicine solutions and home-based 

care robotics. New technologies matched with social and health policies might mitigate the additional costs 

associated with an ageing population, while enabling older people and persons with disabilities to live more 

autonomously.  Online  interaction,  monitoring,  and  appropriate  patient  self-care  could  generate  annual 
savings of up to EUR 120 billion in public healthcare spending across the EU37. A common European data 
space for health could support the rapid development and deployment of personalised medicine through 

data-driven decisions, thereby improving the effectiveness and accessibility of healthcare.

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Early in the pandemic, the EU’s strategic dependencies on third countries for critical goods, like pharmaceutics, 
have  become  obvious.  Of  5200  imported  products,  the  EU  is  highly  import-dependent  in  relation  to  137  in  ‘sensitive 
ecosystems’38, with 14 products belonging to the health ecosystem. An important part of the active ingredients used for generic 
medicines comes from India and China, as well as the majority of raw materials and intermediates used in pharmaceutics. 

Both countries are bolstering their environmental and safety measures for the chemical sector, and China is closing some 
manufacturing plants. This could have implications for the availability and pricing of medicines39. While the EU has strong 
capabilities to produce innovative medicines, it needs to ensure supply security for critical off patent products with particularly 

consolidated  supply  chains  through  alternative  sources.  However,  pharmaceutical  supply  chains  are  highly  complex  and 

require the highest quality. They are therefore particularly vulnerable to supply disruptions. In case of a public health crisis or 

supply disruptions, it is not possible to establish alternative manufacturers of certain key components in the short term. Yet, 
the availability of certain products at all times is key for public health40. Establishing or re-establishing the production of some 
critical medicines and medical countermeasures in the EU might be supported by innovation in manufacturing processes to 

compensate for possibly higher production costs in the EU and to strengthen leadership in green and digital pharmaceutical 

manufacturing.

A European Health Union would strengthen EU’s ability to tackle new health crises. The pandemic has shown the 
need for a full review of EU structures and mechanisms relevant for the prevention and response to cross-border health 

threats. A stronger European Health Union could reinforce the collective preparedness of the EU against health threats as 

well  as  enhance  coordination  in  times  of  crisis.  The  EU  Health  Emergency  Preparedness  and  Response  Authority  (HERA) 

will  help  anticipate  cross-border  threats  to  health  and  underpin  preparedness  and  response  by  focusing  on  anticipatory 

threat  assessments,  foresight,  market  intelligence  and  horizon  scanning  of  emerging  pathogens  and  technologies.  This 

knowledge will also help HERA steer the development of an annual State of Preparedness report. On a global scale, it remains 

important  to  reinforce  the  international  preparedness  and  response  to  future  pandemics,  notably  by  reforming  the  World 

Health Organization and strengthening its capacity to address health emergencies. This also includes working towards an 
international treaty on pandemics41 and boosting local manufacturing capacities. Multilateralism is the only way to prevent 
the reoccurrence of similar crises in the future.

While the EU’s food systems are increasingly challenged, new technologies could strengthen their sustainability 
and resilience. During the pandemic, EU action to facilitate the movement of food across the single market and keeping 
global trade open was crucial. However, climate change and nature degradation may distort supply, demand and trade in the 
major food-producing regions, including the EU, inducing price variability and spikes42 that could have serious socio-economic 
impacts. Changes in demand and diets will also have an influence. For example, advances in nutrigenomics (which connects 
the human genome to nutrition and health) will lead to more personalised diets and new health needs43. The adoption of 
a  legislative  framework  for  sustainable  food  systems  will  accelerate  and  facilitate  the  transition  and  increase  the  food 
sustainability. Disruptive innovations, such as insect- and algae-based food, cellular agriculture, or indoor farming44, could 
lower  the  ecological  footprint  of  food  production.  Biotechnology,  including  new  genomic  techniques,  could  play  a  key  role 

in developing innovative and sustainable ways to protect harvests from pests, diseases and the climate change effects. A 

coherent and sustainable approach to the whole food system, from food production to reducing food waste will be crucial.

2. Securing decarbonised and affordable energy

Securing a sufficient supply of decarbonised and affordable energy is key on the path to a greener and more 
digital Europe. Implementing the EU’s green objectives would mean that by 2050 more than 80% of gross inland energy 
consumption would come from low-carbon sources, mostly from renewables, while fossil fuel for energy purposes would drop 
to less than 10%45. Reducing the EU’s fossil fuel dependency requires increasing the use of renewable energy and rapidly 
diversifying the EU’s energy supply. It also entails developing energy infrastructure, smart grids, and new low-carbon and 

environment-friendly technologies and solutions in the EU and with key third country partners. Lastly, it calls for preventing 

carbon leakage. Greater energy efficiency will be crucial to avoiding possible rebound effect as renewable energy becomes 

cheaper and humanity consumes more of it. To meet the Paris Agreement and European Green Deal targets, energy intensity 
in the EU will need to fall steeply, to about half of today’s levels46, by 2050.

Reaching  the  climate  neutrality  objective  by  2050  could  help  the  EU  to  reduce  its  energy  dependency  from 
around 60% today to 15%47. This should be supported by significant progress on the circular economy. A deeper energy 
union will support decarbonisation, improve energy efficiency, strengthen the internal energy market and increase security 

of  supply.  Transition  pathways  and  a  strong  agenda  for  sustainable  and  low-carbon  infrastructure  investment  in  the  EU 

and  beyond  would  create  investment  opportunities  for  EU  businesses.  It  would  also  help  ensure  the  coherence  of  public 

support and sustained research and innovation in new clean energy technologies and sources, where the private sector does 

not deliver in market failure areas. It will be important to scale up emerging technologies and make them affordable and 

accessible  to  developing  economies  to  ensure  their  large-scale  uptake.  In  parallel,  a  more  circular  economy  and  realistic 

pricing of externalities would decrease energy consumption in the EU.

The  decarbonisation  of  energy  will  have  long-term  effects  on  geopolitical  dynamics,  with  new  strategic 
dependencies emerging and others fading away. It will impact both oil and gas producing economies and leaders in 
renewable power. Efforts will be needed to ease this transition and manage the decline of revenue in vulnerable producing 

states. Significant progress in reducing associated emissions from production (such as methane from fossil gas) will presage 

an orderly transition. New technologies will be key in this context. Making them available and affordable will benefit the EU, 

and could help emerging economies leap-frog fossil-based infrastructure and adopt less carbon intensive alternatives. This 

type of cooperation also offers economic and connectivity opportunities for the EU. Moreover, the decentralised nature of 

future energy networks, coupled with high cyber defence capacities, will support the EU’s resilience, with power generation 

distributed much more widely than in today’s centralised, more vulnerable energy systems.

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FACING CHALLENGES AND SEIZING OPPORTUNITIES FOR THE EU’S GLOBAL LEADERSHIP

19

3. Strengthening capacity in data management, artificial intelligence 
and cutting edge technologies

The EU’s digital sovereignty will depend on capacity to store, extract and process data, while satisfying the 
requirements  of  trust,  security  and  fundamental  rights.  The  digital  economy,  especially  data  processing,  high-
performance  cloud  and  edge  computing,  may  have  a  positive  effect  on  the  EU’s  economy  and  competitiveness48.  EU 
companies and public administration authorities will increasingly adopt user and entity data analytics, Internet of Things, and 
artificial intelligence. Such technologies have wide and varied applications49. The EU has introduced significant investment 
objectives and funding instruments to promote the development and deployment of next-generation and disruptive cloud 

and edge technologies. With the increasing use of data for industrial and business applications, a strategic approach to the 

development and deployment of industrial Internet of Things systems, 5G/6G, and edge computing with the ability to manage 

and quickly analyse big data will be crucial for achieving the objectives of the twin transitions.

Big data and advanced analytics are evolving rapidly, with the USA and China in the lead. They provide real-time early 
indicators of possible crises, early detection of illnesses and long-range detection of military activity. Use of such analytics in 

4. Securing and diversifying supply of critical raw materials

Critical raw materials are essential for the EU’s twin transitions. The expansion of green technologies, such as those 
underpinning wind and solar power, domestic energy storage, and the production of batteries for electric vehicles will drive 
up demand for raw materials such as cobalt, lithium, graphite, manganese and nickel in the next two decades51. However, 
the challenge goes beyond green technologies. For instance, the sector for small drones, for which China delivers more than 

a third of the raw materials, is expected to grow exponentially between now and the 2030s, with high potential for the civil 

and  commercial  sub-sectors,  and  sharply  increasing  demand  for  gallium,  indium,  scandium  and  titanium,  among  others. 

The  defence  industry  relies  heavily  on  critical  raw  materials,  for  example  almost  half  of  the  materials  needed  in  aircraft 
production52 come from non-EU countries. The increase in demand for critical raw materials is expected to coincide with an 
upturn in the major suppliers’ (Figure 4) readiness to impose export restrictions53.

A smart mix of industrial, research and trade policies with international partnerships could ensure sustainable 
and diverse supply. The EU faces challenges relating to access, limited diversification, supply disruptions and insufficient 
processing, recycling, refining and separation capacities. The EU needs to prepare for a future erosion of critical supply security 

decision-making is likely to increase. From an EU perspective, it is important that these technologies are developed respecting 

due to major factors shaping the geopolitical environment: state fragility, economic coercion, and climate change. In most 

fundamental rights and EU values, especially where their development and uptake relies on massive data volumes, including 

cases, industry is best placed to reduce strategic dependencies by diversifying supply, making greater use of secondary raw 

personal data. The development and uptake of critical technologies relies on massive data volumes. Currently, data produced 

materials, and substitution. However, the potential for supply diversification for many critical raw materials is rather limited 

in the EU is largely stored and processed in cloud storage operated by non-EU providers, which makes it subject to third 

due  to  geographically  limited  sources  or  de  facto  mono-  or  oligopolies.  Industry’s  efforts  to  secure  access  to  critical  raw 

country jurisdictions. This creates strategic dependencies and risks for cybersecurity, data protection, access and security. 

materials and reduce its demand (through efficiency, prolongation of product lifetimes and circular economy) require a clear 

It  also  implies  that  non-EU  providers  benefit  commercially  from  processing  this  data.  The  EU  should  build  capacities  to 

long-term strategy. Finally, novel ways of sourcing, such as seabed and space mining need to be explored in accordance with 

store data and ensure access to open, secure and transparent data and high data-rated connection availability. It should 

internationally agreed principles and commitments.

also safeguard its leading edge in the development and deployment of trustworthy artificial intelligence. It should promote 

standards and values with trusted partners around the world.

Faced with the exponential increase in demand for semiconductors, the EU needs to position itself more firmly in 
the development and production of next-generation technologies. Access to semiconductors could be compromised 
by limited production capacity, and shortages can heavily affect business continuity of different industries. The EU has notable 

strengths and is home to a crucial supplier of manufacturing equipment to all leading manufacturers, but it is lagging behind 
in the production of next-generation processors and advanced semiconductors. Taiwan, China, South Korea50 and the USA 
are investing heavily in boosting their domestic production of semiconductors. Furthermore, chipmakers in Taiwan, South 
Korea, Japan and the USA have announced massive private investments in new production capacities. To stay in the race, the 

EU needs to invest in capabilities for the next generation of processors and semiconductor chips. This requires a tightened 

screening of foreign take-over of the European production capacities, investments in research and development, and setting 

favourable conditions across the value chain.

FIGURE 4: MAIN EU-SUPPLIERS FOR CRITICAL RAW MATERIALS54

Norway
Silicon metal 30%

Finland
Germanium 51%

France
Hafnium 84%
Indium 28%

Spain
Strontium 100%

Germany
Gallium 35%

Morocco
Phosphate rock 24%

Turkey
Antimony 62%
Borates    98%

Kazakhstan
Phosphorus 71%

Guinea
Bauxite 64%

Brazil
Niobium 85% 

DRC
Cobalt 68%
Tantalum 36%

China
 38%
Baryte    
 49%
Bismuth 
Magnesium      
 93%
Natural graphite   47%
 99%
LREEs        
HREEs                  98%

Indonesia
Natural rubber 31%

Australia
Coking Coal 24%

Mexico
Fluorspar 25%

Chile
Lithium 78% 

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21

 
 
   
 
 
5. Ensuring first-mover global position in standard-setting

The EU is in competition for ‘first mover’ advantage in standard-setting. This is particularly relevant in emerging 
technologies (and related products and services), such as artificial intelligence, blockchain, quantum, cyber security, sensitive 

and  specialised  data  (e.g.  in  the  fields  of  health  and  space),  digital  currencies  and  chemicals.  Other  priority  fields  include 

green  technologies  such  as  hydrogen,  energy  storage,  offshore  wind  and  sustainable  transport.  Our  trading  partners  are 

taking more assertive actions in terms of standard-setting, e.g. China is working on a ‘China standards 2035’ plan to identify 

next-generation technologies that it could impose on the 140 countries participating in the Belt and Road Initiative. However, 

Chinese state capitalism is not always compatible with open global regulation, human-centred standards and sustainable 

values.

The EU’s track record in setting internal rules and de facto international standards provides a solid basis to 
address this challenge. The so called ‘Brussels effect’55, whereby multinational corporations comply with EU-level regulation, 
is a by-product of the stringency of that regulation and the size of the single market. The EU’s trade position is also a key driver 

in its regulatory and standard-setting power, including in future key markets and technologies. The EU is the biggest player in 

world trade and the number one trading partner for 74 countries, more than China (66) and the USA (31). It is the number one 
trading partner for Asia, Africa, the USA, the Western Balkans and the EU neighbourhood56. The international acceptance of 
EU standards is crucial for its influence in the global order and leadership on climate change, sustainability and protection of 

consumers, personal data and rights at work. To this end, the EU will further engage in active regulatory cooperation, ensuring 

a leading role in international norm setting organisations, such as the International Organization for Standardization.

6. Building resilient and future-proof economic and financial systems

A resilient and stable economy is critical for addressing the EU’s long-term challenges. The EU should further increase 
the resilience and growth potential of its economy by addressing the remaining vulnerabilities in order to facilitate the ongoing 

transitions and to withstand future shocks. Solid economic fundamentals, productivity, investments and reforms will determine 

the EU’s future economic performance, linked with positive financing conditions for the public and private sector.

Europe’s social market economy is also key to its democratic model, protecting people against social risks and their 
consequences. The single market gives a strong basis for a recovery and the resilience of the EU industry, and to facilitate the 

green and digital transitions. To be accepted, these transitions must be fair and accompanied by stronger economic and social 

convergence. The COVID-19 crisis has highlighted the importance of an open, competitive and fully functioning single market to 

enable businesses to grow to the scale needed to compete globally.

The EU’s financial system will undergo profound shifts as a result of climate and technological changes and of 
Brexit. Sustained political determination to remove the remaining obstacles to market integration and to fully implement Capital 

Markets Union and Banking Union is therefore essential to diversify and deepen sources of funding for EU companies, improve 

saving opportunities for EU citizens, strengthen the EU’s ability to absorb shocks and support stronger domestic financial markets. 

This can also address supervisory arbitrage between Member States and with neighbouring third countries. The withdrawal of the 

United Kingdom as a major financial hub from the EU strengthens the need to further deepen the Union’s capital markets, and EU 

markets exhibited strong adaptability and resilience. Nevertheless, medium-term challenges to financial stability and resilience 

remain. Most importantly, EU market participants maintain excessive reliance on essential financial infrastructure outside the EU, 

which could amplify financial stability risks. Moreover, the supervisory capacity in the EU needs to be adequately structured in 

view of the continuing reconfiguration of value chains and relocation of businesses to the EU following Brexit.

The EU financial system also has a key role to play in financing the transition to a climate-neutral economy and 
resilience against environmental degradation. The EU will need EUR 470 billion in additional investment per year to reach 
its 2030 climate and environmental targets, which will require a massive mobilisation of private capital. Institutional and retail 

investors are showing a growing interest in sustainable investment, as witnessed by the five-fold increase of net capital flows 

attracted by equity funds adopting environmental, social and governance (ESG) strategies in the 10 months after such adoption, 
compared to 10 months before57. Greater transparency of the ecological footprint of financial products and ratings, as well as 
access to reliable sustainability-relevant data, will be essential for financing an orderly transition and to prevent ‘green-washing’.

Climate  change  and  environmental  degradation  can  also  affect  financial  stability  directly  because  of  more 
frequent and more severe extreme weather events. Only 30% of all economic losses are currently insured. Investments 
in unsustainable activities and assets are increasingly likely to become stranded and financial stability could be compromised in 

case of a disorderly and sudden reaction to the transition. The EU financial system needs to systematically integrate sustainability 

risks and impacts in financial decision-making, and integrate long-term risk management and disaster risk financing strategies.

The digital age will also influence payment means and capital markets, with a growing role of crypto-assets and 
the development of digital currencies. Digital finance can create new opportunities for citizens and businesses, but consumer 
protection needs to be ensured. A strong, competitive, properly regulated and supervised EU digital finance sector is needed.

The establishment of the Chinese digital renminbi is rapidly progressing and other countries are also working on their own digital 

currencies. The central bank digital currencies would also impact the current model of central banks, the conduct of monetary 

policy, and consumer protection systems. The European Central Bank, together with the Commission, is actively engaged in work 

on the concept of a digital euro, which can bring significant benefits to EU citizens and businesses. Yet, to reap the benefits of a 

public digital euro, it is key to address potential challenges for EU policies, such as those related to financial intermediation and 

stability.

A wider use of the euro in international trade and services, including in energy markets, and EU-wide solutions for 
instant payments would strengthen the strategic clout of the EU. It would strengthen the EU’s resilience, including to the 
extra-territorial application of sanctions by third countries. It would enable the EU to further benefit from international financial 

markets, while managing external risks and avoiding strategic dependencies. At the same time, weaknesses in the integrity of 

third country service providers, markets and infrastructures might create risks.

The EU needs to continue to be on the global forefront in the fight against money laundering and terrorist financing and ensure 

appropriate safeguards against these illicit purposes.

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7. Developing and retaining skills and talents matching EU ambitions

8.  Strengthening security and defence capacities and access to space

Clear responses will be needed to successfully face demographic trends and close existing skills gaps in the 
context of the twin transitions. While greater labour force participation is needed, labour market and social policies will 
need to be adjusted to avoid increase in socio-economic inequalities and ensure fair working conditions, decent income and 

Action  is  needed  to  mitigate  the  increased  risk  of  conflict,  internal  instability  and  disruption  of  critical 
infrastructures.  The  EU  needs  to  continue  to  play  an  essential  role  in  preventive  diplomacy  and  support,  adapting  and 
upgrading its tools to ensure effectiveness of its actions. Building trust and coordination amongst Member States, as well as 

access to social security. Close cooperation with social partners is crucial to respond to this new reality. While ensuring good 

the capacity to better anticipate risks, while learning from experience, could provide the EU with greater influence and the 

working conditions and embedding these within active ageing policies, prolonging the effective retirement age by one year 
could add four million people to the labour market58. Women’s greater labour force participation, through targeted measures 
that  ensure  gender  equality  and  work-life  balance,  would  also  support  employment  rates.  This  is  particularly  the  case  in 
Member  States  with  women’s  participation  rates  below  the  EU  average59.  Greater  labour  force  participation  would  bring 
economic and social benefits across the EU, e.g. a lower ratio of dependent non-workers to workers and higher labour force 

participation. In addition, new approaches to working patterns would help mitigate the downsides of population ageing. Well-

managed legal migration that addresses the skills needs and gaps, matched with effective integration policies, would make 

an important contribution to the EU’s labour market.

Young people deserve better access to quality jobs. Continued support for youth employment through targeted support 
schemes  will  be  needed.  The  next  generation  is  increasingly  ready  for  the  digital  transition60,  although  the  challenge  of 
bridging the digital skills gap and getting more young women to study STEAM (science, technology, engineering, arts and 

mathematics) subjects remains. Easing the transition from education to employment, creating quality entry-level jobs and 

ability to act jointly on defence and security matters. The EU should continue to support Member States to develop adequate 

tools, including to build resilience and respond to hybrid threats in full respect of the EU’s legal and ethical framework. The 

increased likelihood of extreme weather events, future pandemics or other natural and man-made disasters reaffirms the 

need  for  a  stronger  EU  response  and  cooperation  on  civil  protection,  including  to  improve  prevention,  preparedness  and 
response to disasters such as floods, wildfires and infectious diseases64.

In  order  to  enhance  its  defence  capabilities  and  operations,  the  EU  should  commit  to  joining  forces  and 
strengthening  the  coherence  of  recently  established  cooperation  instruments  and  initiatives.  The  EU  needs 
to  ensure  its  capacity  to  defend  -  autonomously  if  needed  -  its  essential  security  interests  in  a  challenging  international 

environment marked by great power competition and a race to technological leadership. The EU has recently made progress 

on defence through the launch of several important initiatives. The remaining vulnerabilities include a relatively low level of 
expenditure, fragmentation of demand and supply, and research, innovation and manufacturing gaps65. At the international 
level, while promoting a rules-based international order and strongly cooperating with NATO, the EU will have to enhance its 

engaging youth in policy dialogue will also be key for young people entering the labour market.

preparedness for a more conflictual world. The development of indigenous defence capabilities will increase the capacity of 

Harnessing the job opportunities of the twin transformations will require policy action supporting the transition 
to new types of jobs. This includes support to regions and workers in sectors that will undergo transition and the right mix of 
support, incentives and framework conditions for companies from traditional and new sectors. Adjustments in education and 

training systems will also be needed, as skills requirements and education levels are increasing fast in the green and digital 
economy, faster than in the economy overall61. The EU’s future labour force will likely be better educated and more capable 
of adapting to the changing nature of work and augmented intelligence. By 2050, 54% of all job market participants are 
projected to have post-secondary education62. STEAM competencies, digital skills and literacy, together with sector-specific 
expertise to achieve the green transition (e.g. in renewable energy, circular economy, new green technologies or nature-based 

solutions) will be indispensable for successful labour market and social integration. To ensure access to the skills of tomorrow, 

the EU’s education and training systems will need to remain on the global cutting edge. The EU should also incentivise more of 
its talents (at universities, in research institutions or businesses) to stay in Europe63 and mitigate brain drain between Member 
States and regions.

the EU to promote such a rule-based international order, while strengthening the role of EU Member States in NATO.

It is essential that the EU supports autonomous, reliable and cost-effective access to space. Space technologies, 
together with artificial intelligence, are strategic means of countering threats and anticipating future risks, such as hybrid 
threats  including  cyber  espionage66.  They  are  important  for  the  future  of  the  EU’s  communications,  Earth  observation, 
manufacturing, security, and an essential ingredient of the twin transitions. They help monitor climate change, transportation, 

security and defence and are key to the functioning of critical infrastructure and technology. Moreover, the weaponisation of 

space by EU rivals is increasingly supported by new technologies such as anti-satellite weapons. The space sector contributes 
EUR 46-54 billion to the EU economy67 and is expected to grow globally to EUR 1 trillion by 204068. The EU is currently a world 
leader in some areas (e.g. satellite services), while other areas (e.g. space launchers and space missions) are dominated by 

the USA, China and Russia, and increasingly by private actors. Other space-faring nations have a very strong domestic market 
– effectively an anchor customer for a considerable launch volume (including launches for defence and national security). 

Lacking this, EU launcher companies are at a competitive disadvantage in the global market, and depend on the commercial 

market to a much higher degree than competitors from China, Russia, the USA, or Japan.

The EU should acknowledge the EU space infrastructure as strategic and maximise the benefits of new technologies, 
such as advanced launchers, nano-satellites, robotics, large constellations, on-orbit operations or quantum-based applications 

(e.g. for secure communications and Earth observation for secure connectivity). It should also prepare itself for new space 

activities and promote on-orbit services or space data centres, building on its expertise in areas where it has a competitive 

industrial capacity, such as telecommunications and Earth observation.

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9.  Working with global partners to promote peace, security 

and prosperity for all

Multilateralism  must  adapt  to  remain  fit  for  purpose.  The  COVID-19  pandemic  and  the  climate 
emergency are perfect illustrations of the need for multilateral solutions and a coordinated global cooperation 

on crisis preparedness and response. In both cases, support to the least developed or more fragile partner 

countries is essential to overcoming challenges ahead, leaving no one behind. A truly inclusive, networked 
multilateralism69 is the only way forward. That is why the EU is committed to striving for a rules-based global 
order with the United Nations at its core. This will involve preserving what works well, reforming what needs 

to change, and extending effective global governance to new areas. The EU should trigger and facilitate 

discussions on the necessary reforms of global governance. It should support the ongoing reform of the UN 

on the basis of a clear set of rules and values. Restoring the dispute settlement system to full functionality 

is also a pressing priority in the necessary modernisation of all of the World Trade Organization’s (WTO) 

functions to ensure it can deal with the challenges of global trade. The governance of international financial 
institutions, such as the World Bank, the International Monetary Fund and the New Development Bank70, 
should better reflect emerging regional and global challenges. Global economic governance should address 

unwanted spill-overs of monetary, fiscal and macroeconomic policies on emerging markets.

Acting more assertively will be key in countering coercive action or extra-territorial sanctions 
imposed by third countries. Open trade and investment is one of the EU’s fundamental strengths, but 
the EU will need to counter economic pressure and act where dispute settlement under WTO or bilateral 

agreements  are  blocked.  Stronger  trade  defence  instruments  need  to  protect  EU  operators  from  unfair 

trade practices and avoid undermining the EU’s strategic priorities. The potential security or public order 

risks arising from the acquisition or control of a particular business, infrastructure or technology call for 

a  fully-fledged  screening  mechanism  for  foreign  direct  investment  and  measures  to  address  potential 

distortive effects of foreign subsidies. EU export credits can ensure a level playing field in non-EU markets 

in which foreign competitors increasingly have financial backing from their governments.

The  EU  will  also  need  to  reinforce  and  develop  strategic  as  well  as  issue-based  coalitions 
and  partnerships  with  specific  countries  and  regions.  The  reinvigorated  transatlantic  alliance,  the 
integration  of  the  Western  Balkans,  closer  cooperation  with  Turkey  and  the  neighbourhood  countries, 
the  strategic  partnership  with  Africa,  connectivity  in  the  Indo-Pacific  and  stability  in  Central  Asia  are 

all  geopolitical  priorities.  China  is  simultaneously  a  cooperation  partner  for  certain  shared  objectives,  a 

negotiation partner, an economic competitor, and a systemic rival. China’s increasing presence in the world, 

including  in  Europe,  must  be  accompanied  by  assuming  greater  responsibilities  for  upholding  the  rules-

based international order, as well as greater reciprocity, non-discrimination and openness of its domestic 
system71.  With  Russia,  the  EU  needs  to  continue  its  principled  approach  of  defending  its  interests  and 
promoting values based on the implementation of the five agreed principles72. The EU must insist that the 
Russian leadership demonstrate a more constructive engagement and stop actions against the EU and its 

Member States and partner third countries. This is indispensable to turn the currently unproductive and 
potentially dangerous tide in this important relationship. Cooperation with the G7 and the G20 will also 

continue to be important.

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27

The EU should strengthen its partnerships with the international organisations that are central to European 
and  global  stability.  It has reached unprecedented levels in its cooperation with the North  Atlantic Treaty Organization 
(NATO),  the  bulwark  of  European  defence73.  The  EU-NATO  partnership  is  an  indispensable  pillar  of  EU  defence  and  it  will 
be  strengthened  further74.  The  EU  should  also  further  strengthen  cooperation  with  the  Organization  for  Security  and  Co-
operation in Europe on issues of common interest, and continue a close relationship with the Council of Europe that bolsters 

our common respect for human rights, democracy and the rule of law. Inter-regional cooperation with organisations such as 

the ocean each year83. With the world’s population expected to increase, human pressure on the ocean will intensify, calling for 
more effective, cross-cutting and integrated ocean governance built on strong cooperation.

To consolidate the EU’s role as a leading global actor on human rights, partnerships with countries and organisations 
that share democratic values are key. Defending human rights requires using all available tools, including the EU Global 
Human Rights Sanctions Regime, political and human rights dialogues, strategic partnerships with international and regional 

the African Union, the Community of Latin American and Caribbean States and the Association of South East Asian Nations 

organisations  and  proactive  engagement  in  international  fora.  It  also  calls  for  stronger  engagement  with  the  private  sector 

provides important levers for regional development and stability, and helps advance the EU’s global agenda. The EU will also 

to  promote  responsible  business  conduct.  To  globally  promote  democracy  and  prosperity,  education  should  also  be  a  core 

need to develop a coherent stance towards other international actors and actively pursue cooperation with partners ready to 

international policy pursued by the EU together with its partners.

work on common solutions to global challenges, and peacefully and sustainably managing the global commons (e.g. oceans, 

space).

The EU stands ready to lead global coalitions on climate and environmental action. With the European Green Deal75 
and its key initiatives, such as the ‘fit for 55’ package76, the EU is pursuing a transformation of the economy and comprehensive 
policies on climate, biodiversity and the environment77. The EU is committed to delivering on the Paris Agreement, the United 
Nations’ 2030 Agenda and its Sustainable Development Goals and the Post-2020 Biodiversity Framework. Their achievement is 

increasingly challenged by the consequences of the COVID-19 crisis. For example, the pandemic could undo years of development 

progress in Africa, where countries are already spending on average 30% of their revenues on servicing debt (up from 20% 
before)78. As the EU accounts for just 8% of global greenhouse gas emissions, and with 85% of the world’s GDP growth expected 
to come from elsewhere by 202479, the EU’s ambitious internal agenda needs to be matched with equally ambitious global 
cooperation. The extent to which emerging economies and societies in particular can decouple human and economic development 

from resource intensive production and greenhouse gas emissions will be decisive. The EU should continue playing a key role in 

maximising support for the transition at global level, beyond succeeding in its own transformation. The EU should strengthen a 

comprehensive EU-led green diplomacy with a priority given to climate change and environmental action, particularly under the 

United Nations Climate Change Conferences framework and other relevant multilateral organisations.

‘Connectivity agendas’80 should be embedded in the EU’s strategic partnerships. They are part of the geopolitical toolbox. 
The USA has the BUILD Act and Japan has the Partnership for Quality Infrastructure. Through its Belt and Road Initiative, China is 

10. Strengthening the resilience of institutions

Public institutions and administrations need to be responsive to societal concerns and effective in delivering 
policies. Increased polarisation shows the need for participatory and inclusive governance to enhance trust and legitimacy 
at all levels. Institutions and processes need to increase their resilience, adapt and innovate to cope with new challenges 

and deliver results for citizens. New forms of participatory democracy, new technologies, civic participation and grassroots 
innovations, as in the context of the Conference on the Future of Europe84, can enhance political participation and strengthen 
the resilience of our democratic systems.

Countering  disinformation  and  ensuring  freedom  of  expression,  pluralistic  and  inclusive  democratic  debates  and  media 

freedom in the EU and beyond will depend on the continued development of common frameworks and practices. Partnerships 

with other global public and private players will be vital in ensuring a more robust and effective response. This must go hand 

advancing its economic, political and security interests across the world, including in Europe. In Africa, China has been by far the 

in hand with the promotion of free and fair elections and the protection of media freedom and pluralism.

largest infrastructure developer over the last decade, with an estimated 10 000 Chinese companies operating on the continent. 

After launching the Blue Dot Network with Japan and Australia, the USA has put forward the ‘Build Back Better World’ initiative 

(B3W) in the context of the G7. China and the USA differ in their approaches, but both are ahead of the EU in their influence 

The implications of current and future trends will require agile policy responses. Uncertainty, volatility, complexity 
and  ambiguity  will  need  to  be  embraced  and  managed.  Developing  strategic  foresight  capabilities  can  help  assess  the 

over internet infrastructures and those that depend on them. The EU has experience developing connectivity and can build on 

impending risks and better prepare to deal with crises and emerging opportunities. The EU Foresight Network of Ministers for 

promising partnership experiences with Japan and India. However, while the EU has laid down the first building blocks of an EU 
connectivity strategy81, it needs to be developed further and aligned with the rapidly evolving realities. In particular, the EU could 
focus on sustainable transportation, resilient and secure digital infrastructure networks, and pervasive information connectivity, 
which are also space-based. A Team Europe approach82 will be key to achieve the necessary scale of implementation.

International  ocean  governance  is  an  increasingly  strategic  area.  Oceans  are  an  essential  regulator  of  the  climate, 
producing  half  of  the  oxygen  in  the  Earth’s  atmosphere  and  absorbing  25%  of  CO2  emissions.  They  are  home  to  a  fragile 
ecosystem that is a source of nutritious food and 4.5 million direct jobs in the EU. The cumulative impacts of resource extraction 

the Future, and the related development of foresight capacities at national level, will be contributing to this.

Greater preparedness also means better monitoring of resilience to withstand challenges and undergo transitions 
in a sustainable, fair and democratic manner. The resilience dashboards85 developed by the Commission (in cooperation 
with Member States and stakeholders), as announced in the 2020 Strategic Foresight Report, are an important step towards 

a more integrated approach for measuring wellbeing beyond GDP. Their multidimensional approach sheds light on challenges 

and opportunities ahead, and helps to navigate societal transformation towards a more sustainable development path. The 
resilience dashboards will also contribute to the ex-post assessment of Europe’s recovery and resilience strategy, including 

and pollution have increased, with 31% of global fish stocks overfished and 4.8 to 12.7 million tonnes of plastic waste entering 

vis-à-vis other key global players.

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SETTING THE STAGE FOR  
TOMORROW’S POLICIES

4

The emerging global order is increasingly multipolar and contested. While we cannot be certain 

as to what the future holds, it is up to us to work towards the most favourable scenario to 

preserve and enhance the EU’s capacity and freedom to act, based on a clear understanding 
of megatrends, uncertainties and opportunities. This Communication underpins a shared long-term 
vision of the EU’s open strategic autonomy on the path towards 2050, highlighting the need for increased 

coherence across time horizons and between the domestic and external policy agenda across ten areas of 

action (Figure 5).

Inter alia, the EU will resolutely pursue climate neutrality by 2050 and step up its global leadership in this 

respect. A more circular economy will be powered by decarbonised energy, green and digital technologies, 

and  world-class  talent.  The  twin  transitions  will  strengthen  competitiveness,  generate  economic  and 

social opportunities, and contribute to the global order, while reducing strategic dependencies. A digitally 

hyperconnected future, driven by big data, artificial intelligence and the quantum jump will be non-linear 

and fraught with uncertainties. Given its profound and diverse impacts across sectors, territories and society, 

technological  progress  needs  to  be  backed  by  a  strong  social  market  economy  and  competitive  single 

market. It also requires an anticipatory and inclusive approach to education and training, empowering people 

to confidently navigate change. Encouraging and facilitating participation will also invigorate democracies.

In pursuing global leadership towards 2050, the EU will not turn inwards but will remain firm 
on its principles and values and agile in its conduct. As an interconnected global pole in a multipolar 
world,  it  will  continuously  leverage  its  close  international  partnerships  to  promote  peace,  stability  and 

prosperity, presenting a united front against hostile actors and common challenges. It will take the lead in 

effective multilateral cooperation, while protecting EU citizens and the economy from unfair and abusive 

practices. The EU will uphold the promise of achieving the twin transitions in a fair and democratic way in 

order to provide the next generation of Europeans with the ability and freedom to chart their own course.

The next Strategic Foresight Report will focus on a better understanding of the twinning between the green 

and the digital transitions, i.e. how they can mutually reinforce each other, including through the use of 

emerging technologies.

1

Ensuring sustainable and resilient 
health and food systems 

Building a European Health Union that invests 
in health workers, innovative care models, new 
tech and prevention. Safeguarding resilient and 
sustainable food system through innovation and 
biotech.

3

Strengthening capacity in data 
management, artificial intelligence  
and cutting edge technologies

Ensuring digital sovereignty and promoting 
values via financing, developing and producing 
of next generation tech, and building capacity to 
store, extract and process data.

Ensuring first-mover global position  
in standard-setting

Leveraging strengths and experience to secure a 
first-mover position in standard setting thereby 
promoting values and a level playing field for 
businesses. 

Developing and retaining skills and 
talents matching EU ambitions

Promoting training and education policies that 
empower Europeans to navigate the transitions, 
while retaining and attracting talent.

5

7

9

2

4

6

8

Securing decarbonised and  
affordable energy

Securing a sufficient supply of decarbonised 
and affordable energy for the twin transitions, 
without creating new dependencies. 

Securing and diversifying supply  
of critical raw materials

Pursuing a smart mix of R&I, industrial and trade 
policies, matched with international partnerships, 
to guarantee the supply of critical raw materials. 

Building resilient and future-proof 
economic and financial systems

Strengthening the international role of the euro 
and the financial system’s ability to drive  
innovation and absorb shocks in the context of 
the twin transitions and developing the digital 
euro. 

Strengthening security and defence 
capacities and access to space

Joining forces and developing capacity to 
anticipate and respond, if need be on its own, to 
evolving threats in security and defence.  
Ensuring access to space and acknowledging 
space infrastructure as strategic. 

Working with global partners to promote 
peace, security and prosperity for all

10

Strengthening the resilience  
of institutions

Jointly adapting multilateralism to a changing 
reality, strengthening coalitions with like-minded 
partners, pursuing issue-based cooperation on key 
interests, acting assertively to counter external 
coercion and protect EU values and interests.

Adapting democratic institutions to strengthen 
their resilience and capacity to anticipate 
change, also through foresight, and deliver on 
the promise of freedom, equality and wellbeing 
for all. 

30
30

31
31

FIGURE 5: EU’S OPEN STRATEGIC AUTONOMY ON THE PATH TOWARDS 2050

ENDNOTES

1.  The Communication builds on the Joint Research Centre (JRC)’s ‘science for policy’ report: JRC (2021), Shaping & 

24.  Alizada N., Cole R., Gastaldi L., Grahn S., Hellmeier S., Kolvani P., Lachapelle J., Lührmann A., Maerz S. F., Pillai S., Lindberg 

securing the EU’s Open Strategic Autonomy by 2040 and beyond. The foresight process included consultations with 

S. I.. 2021. Autocratization Turns Viral. Democracy Report 2021. University of Gothenburg: V-Dem Institute.

Member States and discussions with partners in the European Strategy and Policy Analysis System, a literature review, 

25.  See, for instance, Sharon Lecocq (2020), EU foreign policy and hybrid actors in the Middle East: ready for geopolitical 

Delphi survey (involving Commission services, the European External Action Service and relevant stakeholders from 

contestation?, Global Affairs, 6:4-5, 363-380, DOI: 10.1080/23340460.2021.1872401.

academia, industry, civil society, public administration and international institutions) and scenario building. In addition, 

26.  UN (2019), World population prospects.

the ongoing work on the resilience dashboards, as well as other foresight activities helped inform the analysis of the 

27.  JRC (2021), Shaping & securing the EU’s Open Strategic Autonomy by 2040 and beyond. 

EU’s open strategic autonomy.

28.  The total age dependency ratio relates the number of individuals who are likely to be dependent on the support 

2.  2020 Strategic Foresight Report: Charting the course towards a more resilient Europe (COM(2020) 493).

of others for their daily living – the young and the elderly – to the number of those individuals who are capable of 

3. 

IPCC (2021), Climate change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment 

providing this support (Eurostat). 

Report of the Intergovernmental Panel on Climate Change. 

29.  JRC (2019), Demographic scenarios for the EU: migration, population and education.

4.  World Meteorological Organization (2021), WMO global annual to decadal climate update.

30.  UN (2019), World population prospects.

5. 

International Committee of Red Cross and Red Crescent Societies (2019), The Cost of Doing Nothing.

31.  This is already felt in international organisations, with emerging economies increasingly shaping policy.

6.  Ercin, E., Veldkamp, T.I.E. & Hunink, J. (2021), Cross-border climate vulnerabilities of the European Union to drought (Nat 

32.  The EU is also a ‘non-enumerated’ member of G7. As it participates in this cooperation as a supranational organisation, 

Commun 12, 3322). 

it is not taken into account in this comparison.

7.  Naumann, G., Cammalleri, C., Mentaschi, L. et al. Increased economic drought impacts in Europe with anthropogenic 

33.  The Human Development Index was created to emphasize that people and their capabilities should be the ultimate 

warming. Nat. Clim. Chang. 11, 485–491 (2021).

criteria for assessing the development of a country, not economic growth alone.

8.  European Commission (2021); *This indicator shows how much freshwater is withdrawn by economic activities, 

34.  The figures correspond to shares of nominal GDP, measured in current US dollars. They are obtained from the OECD’s 

compared to the total renewable freshwater resources available. **Armed Conflict Location & Event Data Project, event 

latest long-term projections (Economic Outlook 103, July 2018). With PPP adjustment, the rise of China and India is 

types included: battles, explosions/remote violence, violence against civilians. Source data: JRC, GADM, IOM, ACLED.

faster. China’s adjusted GDP is already higher than that of the USA or the EU and India will overtake them by 2040. 

9.  European Environment Agency (2019), The European environment - state and outlook 2020. 

This is due to the fact that economic convergence tends to imply an increase of local prices (of services, for example), 

10.  COM(2021) 380.

so PPP adjustment increases the GDP of emerging economies relative to developed economies. Real GDP comparisons 

11.  Kyle J. Foreman et al. (2018), Forecasting life expectancy, years of life and all cause and cause specific formality for 

among these four examples are similar to the ones based on nominal GDP. 

250 causes of death: reference and alternative scenarios for 2016-2040 for 195 countries and territories (The Lancet).

35.  US National Intelligence Council (2021), Global trends 2040. Published every four years since 1997, the report assesses 

12.  The EU is responsible for the biggest share of worldwide patent applications in advanced manufacturing technologies 

the key trends and uncertainties that will shape the USA’s strategic environment in the next 20 years. The European 

and the Internet of Things for mobility. European Commission (2020), Science, research and innovation performance of 

Policy and Analysis System was consulted in the preparation of the latest edition.

the EU 2020.

13.  SWD(2021) 352.

36.  European Commission (2020), Report on the impact of demographic change.

37.  COM(2021) 118.

14.  The USA is investing more than EUR 1 billion in the period 2019-2028 and China is building a EUR 9 billion National 

38.  SWD(2021) 352. The updated New Industrial Strategy identifies a number of areas where the EU’s dependence on 

Laboratory for Quantum Information Sciences. JRC (2021), Shaping and securing the EU’s Open Strategic autonomy by 

a limited number of suppliers is most prominent, which are defined as ‘sensitive ecosystems’ (e.g. aerospace and 

2040 and beyond. 

15.  COM(2021) 118.

16.  A greenhouse gas with greenhouse effect 25 times of that of carbon dioxide. 

defence, electronics, health etc.). The SWD announced a second stage of review of potential dependencies and periodic 

monitoring of the EU’s current and future dependencies.

39.  European Commission (2020), Foresight ON health newsletter. 

17.  World Economic Forum (2015), Scaling technologies to decarbonise energy. Fusion-based nuclear energy generation 

40.  For example, the EU’s heavy dependency on plasma from the USA, in particular where no other suppliers are available, 

can help solve the problem of radioactive waste resulting from fission-based nuclear energy.

undermines its health capacities and ability to react in the event of new public health crises.

18.  World Economic Forum (2020), The future of jobs report 2020.

41.  The EU and a group of countries from all WHO regions have built a coalition ahead of the 74th session of the World 

19.  Pouliakas K. (2018), Determinants of automation risks in the labour market, a skills-needs approach, IZA Institute of 

Health Assembly in May 2021 to establish a process towards a WHO convention, agreement or other international 

Labour Economics. 

20.  Source: European Commission.

instrument on Pandemic Preparedness and Response. 

42.  European Commission (2021), Foresight ON synergies between civil, defence and space industries newsletter. 

21.  OECD (2021), What happened to jobs at risk of automation, policy brief on the future of work. 

43.  Fraunhofer Institute for Systems and Innovation Research (2019), 50 trends influencing Europe’s food sector by 2035. 

22.  European Parliament, E-waste in the EU: facts and figures (infographic). 
23.  Freedom House, Freedom in the World 2021. 

44.  European Commission (2020), Foresight On health newsletter. 
45.  Stepping up Europe’s 2030 climate ambition Investing in a climate-neutral future for the benefit of our people, 

SWD(2020)176.

32

33

46.  International Renewable Energy Agency (2018), Global energy transformation: a roadmap to 2050.

70.  The New Development Bank aims to mobilize resources for development projects in BRICS, emerging economies and 

47.  Source: Eurostat.

developing countries.

48.  The effect of the digital economy on GDP and productivity is still debated. According to recent macroeconomic 

71.  European Commission, (2019), EU-China: a strategic outlook.

simulations, the cumulative additional GDP contribution of new digital technologies by 2030 could amount to EUR 2.2 

72.   See JOIN(2021) 20.

trillion in the EU, a 14.1% increase from 2017 (DG CNECT (2020), Shaping the digital transformation in Europe). At the 

73.   Sixth progress report on the implementation of the common set of proposals endorsed by the EU and NATO Councils 

same time, some economists point out that new technologies have little effect on GDP and productivity. 

on 6 December 2016 and 5 December 2017 (June 2021).

49.  For instance, multimodal connected and automated mobility and seamless data sharing could support the more 

74.  NATO (2021), Brussels Summit communiqué.

sustainable move of people and goods, greatly reduce road fatalities and injuries, and enhance quality of life and the 

efficiency of transport systems.

75.  COM(2020) 640.

76.  COM(2021) 550.

50.  China is investing over USD 200 billion under the ‘Made in China 2025’ plan, with the ambition of reaching 70% 

77.  EU greenhouse gas emissions were reduced by 24% between 1990 and 2019 while the economy grew by around 60% 

autonomy in chip-making by 2025. South Korea plans to invest USD 450 billion in semiconductors by 2030 with a 

over the same period. European Commission (2019), the EU’s track record on climate action. 

focus on manufacturing technologies. Taiwan Semiconductor Manufacturing Company TSMC is investing over USD 100 

78.  JRC (2021), Shaping and securing the EU’s Open Strategic autonomy by 2040 and beyond.

billion in three years in expanding production capacity. 

79.  COM(2021) 66. 

51.  European Commission (2020), Critical raw materials for strategic technologies and sectors in the EU – a foresight study.
52.  Critical raw materials such as magnesium, niobium, germanium, borates, cobalt and beryllium and the rare earth 

80.  Connectivity can be defined as bringing countries, societies and people closer together. It encompasses physical and 

institutional social-cultural linkages, sectorial agreements as well as regulatory and technical cooperation in concrete 

elements, such as dysprosium, samarium, neodymium, praseodymium, and yttrium.

sectors such as transport, energy and digital.

53.  European Commission (2021), Raw Materials Scoreboard, 3rd Edition.

81.  The EU’s approach to connectivity has been set out in the Joint Communication “Connecting Europe and Asia - Building 

54.  JRC (2021), Shaping and securing the EU’s Open Strategic autonomy by 2040 and beyond. 

blocks for an EU Strategy”, JOIN(2018) 31.

55.  Bradford A. (2020), The Brussels effect – how the European Union rules the world.

82.  Team Europe consists of the EU, Member States and their diplomatic networks, finance institutions including national 

56.  COM(2021) 66.

57.  European Financial Stability and Integration Review (EFSIR), SWD(2021) 113. 

58.  European Commission (2020), Employment and social developments in Europe.

59.  Current levels range from 47.5% to 79.3%, see COM(2020) 152.  

development banks and implementing agencies, as well as the European Investment Bank and the European Bank for 

Reconstruction and Development.

83.  European Environment Agency (2019), The European environment - state and outlook 2020. 

84.  https://futureu.europa.eu/ 

60.  The proportion of young adults with above basic digital skills is over 50% and rising; see the JRC’s ongoing work on 

85.  https://ec.europa.eu/info/strategy/strategic-planning/strategic-foresight/2020-strategic-foresight-report/resilience-

the ‘digital resilience’ dashboard, based on Eurostat data (digital skills) and PREDICT CORE data (available places in 

dashboards_en; resilience dashboards are monitoring tools for assessing the EU’s and Member States’ vulnerabilities 

and capacities across four dimensions: social and economic, green, digital and geopolitical. 

advanced technologies).

61.  European Commission (2019), Employment and social developments in Europe.

62.  JRC (2019), Demographic scenarios for the EU: migration, population and education.

63.  PPMI, IDEA Consult and WIFO (2020), MORE4 study, Support data collection and analysis concerning mobility patterns 

and career paths of researchers. 

64.  Under the current EU Civil Protection Mechanism the EU Member States and Iceland, Norway, Serbia, North Macedonia, 

Montenegro, and Turkey cooperate on civil protection to improve prevention, preparedness and response to disasters. 

Constant monitoring by the Emergency Response Coordination Centre ensures rapid deployment of emergency support 

through a direct link with national civil protection authorities. Specialised teams and equipment, such as forest fire-

fighting planes, search, rescue, and medical teams can be mobilised at short notice for deployments inside and outside 

the EU to support the response efforts of countries affected by disasters.

65.  European Defence Agency (2020), CARD report.

66.  NATO (2020), Science & technology trends 2020-2040: exploring the S&T edge.

67.  European Commission (2020), Foresight ON security newsletter.

68.  Morgan Stanley (2016), The space economy’s next giant leap.  
69.  See, for instance, https://www.un.org/sg/en/content/sg/speeches/2020-09-21/remarks-general-assembly-ceremony-

marking-the-75th-anniversary-of-the-united-nations.

34

ENDNOTES

35

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