The Nobel Peace Prize 2012 was awarded to the European Union “for over six decades of contributions to the advancement of peace and reconciliation, democracy and human rights in Europe.” Why not awarding the Nobel Prize in Economics in 2023 to the EU for building up a single market, including a monetary union, in just three decades?
Today, the European single market has a sound foundation of accumulated legislation, the so-called acquis communautaire of legal acts and court decisions that constitute the body of European Union law that came into being in 1993. The sum of EU legislation is divided into more than 30 policy chapters including approximately 100,000 documents. Developing this certainly needs competence and political will but especially also a flexibility in decision-making that brings about a better solution for the economy and society. The EU had to permanently adapt its institutional architecture and skills in several processes adapting the European treaties (Lisbon 2009, Nice 2003, Amsterdam 1999, Maastricht 1993) and especially in a variety of turbulent crises (dot com 2001, banking and capital markets 2008, migration 2015, Brexit 2016, COVID 2020 and war in 2022) and today it also must appear surprising that major systemic throwbacks did not happen.
There is more stability and solidarity in this system of governance than we are willing to recognize. It is here where the European Union might have its strongest comparative advantage compared to other cooperative concepts between sovereign states and the question arises of how to better use this competence in that major transition of our economy that lies ahead of us?
Reaching the EU‘s climate goal of reducing EU emissions by at least 55% by 2030 compared to 1990 levels will become a legal obligation under European climate law. The Fit for 55 packages, submitted to the European Council in July 2021, is being discussed across several policy areas, such as environment, energy, transport and economic & financial affairs. Beside new initiatives, a multitude of legislative measures to revise and update EU legislation is needed to ensure that EU policies are in line with the climate goals agreed by the Council and the European Parliament.
This will take time, and already today, as Prime Minister Ulf Kristersson of Sweden holds the presidency of the European Council in the first six months of this year, as made clear in the following statement: “An economically strong and competitive EU is crucial to the EU’s global standing. We know that innovative companies in a free and open market not only generate growth and welfare, but also lead the green and digital transitions. But in truth, the EU is lagging behind. Clear competition policy and better regulations for European industry are therefore necessary.”
Sweden putting competitiveness, education and skills on its agenda which is coherent since 2023 is the European Year of Skills. This initiative is stemming from the perception of the challenges and opportunities brought to the labor market by the digital and green transitions, which call for new skills to be developed to make them happen.
Therefore, we do need to distinguish between education and the development of skills in a professional career and how to make both systems more compatible in order to root our economic competitiveness much more deeply in sustainability as a concept in itself.
This is much more than the transition of an existing economic structure and its companies with established business models to digital and green “instruments”. We are facing a transformation of global markets and, therefore, an upheaval of entire business models in a short period of time.
This requires good governance what we can expect the EU to have but also adequate educational systems and a dynamic framework of incentives for young people to better develop their professional skills in the European single market. That is an area where the EU has yet to realize its full potential.
There are good examples! In 2022, being the year of European youth, much attention was paid to another European success story, the Erasmus Program. Adopted in June 1987, only 3,244 students went abroad and the program involved only 11 countries. Today, the program counts more than 10 million direct participants and each year, more than 300,000 students’ study or train under the Erasmus+ umbrella.
So many experiences and learnings would require stronger anchorage in the European treaties to truly raise the potentials for the challenges and transformation that lies ahead of us. The features of a modern society based on a transnational concept of governance must be enshrined in the European Union and this Union must be able to play its role in an increasingly difficult global environment.
Circumstances today are not only characterized by the disruptive effects of technological evolution. The COVID pandemic has made visible how interdependencies between nations have evolved in global trade over the last decades. It has become apparent what those risks mean for the strategic sovereignty of the major global powers. This will without any doubt have consequences for further developments in the system of global value chains in the years to come. A further dynamic element for change will certainly be also the behavior of consumers about sustainability issues.
Faced with demographic and economic changes in the EU, only a small proportion of foreign graduates find jobs that match their skill level. Organizational recruitment and employment practices need to adapt and skill formation as well as the structuring of careers must develop in a more professional manner. Much too often, foreign graduates are disadvantaged just because the employment systems of the host countries operate according to the logic of national labor markets. It is here where institutional learning at the governmental and company level needs to be accelerated. Like in other areas, for example, in the field of handling longterm unemployment, policymaking can certainly be much improved in the fields of education and skills.
Since always in different countries in Europe there was a multitude of different technical applications existing and competing. This competition offered a great variety of new technologies coming up, the European single market then accelerated the adjustments of new solutions and made economies of scale possible. In today‘s challenging environment, competitiveness will be heavily reliant on the ability to detect new and reliable trends and make sound decisions. Skills for a higher quality in decision making will be a key factor for competitiveness and the EU has all the assets to make the development of professional skills more dynamic in a functioning transnational concept of governance.
Here are two examples: Recent developments in the field of mobility in urban environments are difficult to judge since they are still in an early stage so that management and regulators alike struggle with decisions. In the field of new solutions for the circular economy existing regulation and vested interests of established business models do make decisions difficult. A better exchange of skills at a transnational level could help to facilitate orientation and develop a deep understanding of the correlation between the effects of various new tech evolutions.
Very few European citizens do collect professional experiences in another country over a longer period. In general, the mobility of European citizens to move to another region or even country is quite low. Such mobility could have an influence on the transformation of the economy by bringing about a better exchange on possible solutions. Culture is key in this context and diversity does add to creativity. This next generation of EU leaders will require appropriate investments to bring about better societal solutions, but young Europeans will also require opportunities for future professional development in this new environment. Therefore, stronger incentives are needed to also start a professional career abroad. This will automatically have an impact on decision-making in companies that need to adapt their business model to future changes.
