VERA – Forward Visions on the European Research Area

VERA is funded by the European Union's FP7 programme for research,
technological development and demonstration under grant agreement no 290705

AUGUR - Challenges for Europe in the world of 2030

Code: B05

Primary project information

Lead: CEPN (CNRS-Paris13)
Additional project partners: CFAP (UCAM)CDPR (SOAS)ISMERI EUROPAKU-TIGER (Kozminski University) WIIWSMASH
Type of activity: FLA
Date conducted: 1/10/2009-1/10/2012
Date of Publication: 2012
Duration: 35 MONTHS
Summary: The AUGUR challlenge is to capture, within a set of scenarios, the characteristics and implications of a variety of patterns that may occur in 2030 in all domains, be it political, economic, social, environmental or technological, in Europe and in the world. The project wants to take stock of long term trends identified in demograpic and environmental changes, as well as featuring some of the effects of likely changes in technology and behaviours. But it also wants to take into account the important institutional transformations that could come out of the major crisis that the world economy is confronted with.
Financed by: EC funded project
Budget: 2-3 M EURO
Research area/market/industry/sector: Financial markets and international regulation, Innovation and technology diffusion, Global development, demography and migration, Energy, primary resources and environmental challenges, International governance and regional economic integration, Well being and living conditions, Political economy and politics (
Main report (full title): several reports available at The most 'synthetic ones' are Note of Synthesis - A Macro Model of World Regions; Revised historical data and scenarios; Policy brief - The World of Finance 2030; Europe’s role in global business 1990-2010; International Migration by 2030; WP6.2 - Global Governance at a crossroads: Perspectives of change for the next two decades; Public Ownership and Public Services by 2030; D7.3 Scenario analysis: public goods and structural policies; D3_2_Hunya_role_of_business_organization_FINAL


Economic Challenges: In coming decades it will be essential to institute effective government programs in Europe and elsewhere. Financing mechanisms for such programs must be devised to ensure that deficits can be incurred when necessary and that government debt is not vulnerable to credit crises such as those now afflicting Europe. Cohesion will remain at the top of the agenda. From a medium and long term perspective, the world system exhibits persistent but changing trends, cyclical fluctuations of trade and income and short-term episodes of considerable financial volatility. Trends in trade, finance and GDP will continue to be interrupted periodically by crises and recessions. The recent crisis has resulted in further attempts to develop and extend the international regulatory architecture, attempts that have so far not resulted in a satisfactory response to the deficiencies exposed by the crisis. A major question for the future will be: can the global financial market survive, or will there be different market structures and different regulatory frameworks in East and West?
Economic Challenges Shortlist: Develop financing mechanisms for European governments, which keep them invulnerable from credit crises such as those now afflicting Europe; Advance European cohesion; Possible failing/discontinuation of global financial market system; Possible need for different financial market structures and different regulatory frameworks in East and West
Geopolitical Challenges: The geo economic governance of the last two decades of the 20th century relied more on market mechanisms as a source of growth and welfare (parting with the spirit of social justice warranted by the state), while concerns on negative externalities increased, especially regarding the environment. The geo financial governance of the last decade was clearly asymmetric, reinforcing the shifts in the developed world and favouring emergence of some large developing countries, able to benefit from the expansion and transfers of international trade. The post 2008 governance will certainly give a new weight to environmental issues. Previous global governance relied much on harmonised governmental regulations. International institutions were in charge of the supervision of global markets. To respond to new concerns, when states are individually less in position to enforce new rules, the question is whether (large internationalised) firms can adjust their practices accordingly.
Geopolitical Challenges Shortlist: Need for new foci of geo financial governance post 2008, e.g. less reliance on market mechanisms and more weight to environmental issues; Conflicts of power and purpose between states and private international institutions regarding supervision and rules enforcement in global markets
Societal Challenges: Europe will also face ongoing problems of unemployment and social fragmentation in many regions as well as migration pressures and difficult relationships with neighbouring countries. As a result of these pressures government budgets in individual member countries will remain vulnerable to periodic confidence crises unless the European Union develops a stronger system for sharing resources and managing fiscal policies. The increased importance of markets and market relationships in daily life in all parts of the world continues to erode many traditional ways of life and community institutions. At the same time the spread of automation to nearly all market sectors and the increasing concentration of firms at the national and global level generate rising inequality in many countries, where increases in the share of profits and the pay of higher-paid employees absorb most of the growth of income while the wages of lower-paid employees and people working in informal occupations scarcely improve. Migration pressures from surrounding regions and within Europe itself must be expected to continue. This is an issue that has to be faced. In the long run migration pressures may eventually diminish as economic conditions in surrounding countries improve and provide better opportunities for their citizens. Meanwhile immigrants will arrive. The major issues are where immigrants will settle, the conditions under which they live and the impact on local populations
Societal Challenges Shortlist: Unemployment and social fragmentation in many European regions; Migration pressures in Europe and difficult relationships with neighbouring countries; Need for stronger European system for sharing resources and managing fiscal policies to avoid periodic confidence crises; Rising inequality in many countries, where increases in the share of profits and the pay of higher-paid employees absorb most of the growth of income while the wages of lower-paid employees and people working in informal occupations scarcely improve; Need to provide settlement for global migrants.
Technical Challenges: Security issues can for instance concern either potential “classic” conflicts between nation states, or fights against guerrillas, mafias, or terrorism, but also engagements on new fronts to fight environmental disasters (floods, earthquakes, nuclear accidents…) as well as dramatic shortages (in energy, water or food). Science and technology policies are thus to be geared by a new set of objectives and new combinations of actors. Important in that respect are the regimes of intellectual property rights that may develop. Open science has become a major issue, especially in a context where north south relations are at the core of the governing assumptions.
Technical Challenges Shortlist: "New" forms of conflicts/engagements to fight environmental disasters such as floods, earthquakes, nuclear accidents, etc.; New forms of conflicts/engagements due to dramatic shortages in energy, water or food; "New" security issues require different science and technology policies, which are geared by a new set of objectives and new combinations of actors.; New regimes of intellectual property rights may develop to govern evolving science and technology policies
Mobility Challenges Shortlist: Continuing migration pressures within Europe and from surrounding regions; Need to find solutions to problems concerning immigrants settlements, immigrants' living conditions, and impact on local population.

Summary of relevant aspects

Connecting fields: Global trade, GDP growth and capacity utilisation are highly correlated although the distribution of trade, production and investment shifts through time.
Background information: AUGUR is an FP7 forward-looking study assessing the position of Europe in the world in 2030. All the major dimensions that will shape the world of 2030 are considered, from economic growth, finance and trade flows to technologies, environmental impacts, migration, well being of populations and values that they espouse.


Scenario 1: Reduced Government”:
This scenario is based on the assumption of a progressive reduction of government budgets, fiscal deficits and of the role of the government especially in the high income regions of the world. It is projected that the global development and policy making will be driven by large corporations and financial institutions. These will support business friendly environments
meaning both free movement of goods, services and capital and the reduction of risk of doing business. In regions where business friendly conditions prevail, investment and trade will flourish. Global corporations will progressively react to global challenges, spread investments in less developed regions like India and South America, increase local production in Africa and increase energy production from non-carbon sources. Scenario 1 concludes that “as global business dominates international relationships, investment in production of commodities and manufactures may become less concentrated”. This is
seen as a result of policy changes in low and middle income countries in favour of FDI and the integration of local business with international networks. Thus most parts of the world would become accessible and benefit from production by TNCs. The behaviour of TNCs is a central component of this scenario. It is expected that business will replace partially the role of governments and create a more free environment under which it may flourish. As a result, in regions where the role of the government is already small in investment and demand generation, growth may accelerate. In other regions/
countries, with currently large government investments and consumption, growth may decelerate if the role of government diminishes. The international and domestic environment for business and FDI may become more business-friendly when the role of government is reduced. Growth at an advanced stage of development depends to a high extent on the availability
of public services like high standard of education, R&D and business infrastructure. If support to business directly or indirectly by government programmes in R&D, education, etc. is curtailed, innovation may suffer (D3_2_Hunya_role_of_business_organization_FINAL, p. 34)
Scenario 2: “China and US intervention”:
The second scenario considers a larger and more effective role for government reinforced by a cooperation between the US and China. Europe and most other high and middle income region will follow their leadership. Successful labour market policies will be applied in developed regions. China would import more, avoid labour shortage and contain current account
surplus. As a result, GDP per capita would increase in Europe faster than in the base-line scenario. Also the rest of the world would benefit except West Asia which would lose oil revenues due to international price regulation. Provided the US-China relations will increase global governance and freer trade will be established between those two blocks, the EU may find itself in a weaker negotiating position. It will be up to the European corporations to make the best of this framework and the cooperation with both leading regions.
They may invest more to access markets in China and invest also in the US to make use of technological innovation. Another option is that the cooperation between the twomain powers will be closer to a cold war and all other regions in the world will have to choose sides. If Europe will find its place on the side of the US in this scenario, corporate integration would deepen between the two regions and give a boost to R&D and trade.Europe may also opt for strengthening its ties with China and benefit from market access there instead of technology access in the US. (D3_2_Hunya_role_of_business_organization_FINAL, p. 35)
Scenario 3: “Regionalization”:
This scenario is based on the assumption of fragmentation of the global system in continentalgroupings like the Americas, Africa, East Asia, Other Asia including the CIS, and Europe. These world regions would have their own internal pattern of investment and specialization.Trade and investment would decline between blocks but intensify within blocks. Regions with already advanced intra-regional cooperation may benefit less than those where such cooperation boosts business. Intra-regional FDI is most advanced in Europe. But it is increasingly also in the Americas and in East Asia. The other two regions, Africa and Other Asia are more heterogeneous with little cohesion expressed in trade and FDI. The current sourcing trends support this scenario as trading costs and investment risks are high. Closeness in terms of geography and culture will gain in importance. Also currently, East Asia undergoes deepening integration due to activity of multinational companies from
the developed countries in the regions and the emerging Chinese multinationals. US investors have increasing activity in the emerging economies of Latin America. On the longer run, Europe may be too small for the size of European firm. Much of the
CEECs have been integrated by takeovers and greenfield investments and markets may not grow there in the earlier expected way. Investing companies need to develop new external directions: increase technology ties with the US, increasing investment and sales in China and integrating EU borderlands in the CIS and North-Africa. It seems that European
firms would suffer most in case access to other continents would become more difficult. Lower FDI and trade with the US and Asia due to protection would be a major blow to development. (D3_2_Hunya_role_of_business_organization_FINAL, p. 36)
Actions/solutions implied: The main challenge for European policy-makers and institutions in the next decades is likely to be the need to maintain or improve security in many fields such as finance, employment, housing, personal income and savings, the environment and relationships with other countries including those surrounding Europe.

Specific fields for action will include:
- job creation measures in regions with low employment rates
- income support for the ageing population
- more general redistribution of income and wealth to protect citizens financially and offset trends toward increased inequality
- investment in new technologies and adjustments of infrastructure to ensure energy security, adapt to climate change and reduce environmental impacts
- measures to cope with immigration and reduce income and employment gaps vis-a-vis neighbouring countries
- support for rapid development of public services, infrastructure and diversified production in low income countries in Africa and South Asia.
Who benefits from the actions taken?: See target groups

Meta information

Time horizon: 2030
Methods: Literature Review; Scenario writing; Modelling
Target Group: Government departments or ministries; Government agencies Research funding organisations, e.g. research council; Public research organisations (non-HEI); Higher education institutions (HEI); Large corporations / transnational companies (TNC); European Commission; European Parliament' International organisations (OECD, UNESCO, UNIDO, etc.); Non-governmental, not for profit, organisations (NGO); Civil society
Objectives: to capture, within a set of scenarios, the characteristics and implications of a variety of patterns that may occur in 2030 in all domains, be it political, economic, social, environmental or technological; to take stock of long term trends identified in demography, environmental changes as well as to feature some of the effects of likely changes in technology and behaviours; to take into account the important institutional transformations that could come out of the major crisis that the world economy is confronted with. (
Countries covered: N/A
ERA actors/stakeholders mentioned: see target groups + list of members in the three project committees are available at Also list of relevant stakeholders are found at (international institutions) and (civil society organisations)
Geographic scope:

Entry Details

Rapporteur: Effie Amanatidou
Rapporteur's organization: UNIMAN
Entry Date: 01.06.2012