Demographic Change and Social Cohesion in Europe

1. Parallel Workshop Session: Workshop 1.2 Demographic Change Inputs from SeGI ESPON Internal Seminar 2012 “Territorial Development Opportunities in Europe and its Neighbourhood Fostering Global Competitiveness”

2. Individuals who have never used a computer, 2009 Question 1 Broadband, internet and skills in ICT are considered important for economic development and social cohesion. A trend of polarisation regarding individuals who have never used a computer within Europe. Differences in accessibility to ICT in different countries and regions. How much an individual can use internet – and the devices needed to access internet – is dependent on contextual aspects such as income distribution, age structure in the population and educational level.

3. Early school leavers, 2009 Question 1 The objective is to develop the education systems in order to increase European competitiveness. A higher share of early leavers is not good for competitiveness or for social cohesion as it compromises the future of these regions. The regions with the highest share of early school leavers are from the Iberian Peninsula, Turkey, some from Greece, Bulgaria, Romania, U.K., Iceland and Italy. In the wake of the economic crisis starting 2008, the educational system has been subject to budget cut-backs. Children from socially excluded or marginalised households are overrepresented among the early school leavers.

4. Question 1 During the current on-going economic and financial crisis it has become clear that several EU members do not have the financial resource to maintain the present provision of Services of General Interest in general, and especially Social Services of General Interest. Many SGI are critical to the delivery of the modern welfare state. Empirical evidence from the case studies, demonstrates the emergence of such trends in some regions of Europe. In recent decades rural, peripheral, insular, mountainous and outermost areas have in general experienced decreasing accessibility to SGI, while the opposite trends are evident in metropolises and urban agglomerations. The on-going privatisation of SGI will not improve the situation for these disadvantaged regions. The impact on SGI is negative as a consequence of unbalanced population increases, shrinking economies and significant environmental problems – negative driving forces that reinforce each other. Territorial cohesion will be eroded and the risk of promoting closed and protectionist economies are one of the threats that can see an already precarious situation made worse. SGI will be a low priority and impacted very hard as the economic surplus will be too small for large investments in the service sectors despite the huge level of demand. Private actors are hesitant to invest and operate in sparsely populated areas due to low (if any!) profitability. A large share of the population in Europe and in the neighbouring countries with low accessibility, affordability and availability to SGI are found in marginal groups in society.

5. Question 2 The major metropolises and urban agglomerations will experience a positive development of SGI as a consequence of balanced population increases, expanding economies and an absence of major environmental problems. A diversified economic structure will help the economy recover and will be more resilient and less vulnerable to the challenges posed by the new emerging economies. Positive demographic developments will also have a positive impact on the European economy as the shortage of labour, especially with regard to SGI, will not be so acute. An opposite development is seen in rural, peripheral, insular, mountainous and outermost areas. Due to a relatively higher attractiveness of labour situation in fields of SGI in Europe, labour force may continue/intensify to be pulled from neighbourhood countries. For the countries/areas of origin (in Europe and the neighbouring areas) this could create severe shortages in skilled labour in the areas of SGI. Together with international immigration and ageing, demands and needs for SGI will diversify; especially in fields of SSGI (education, health, housing, culture) and related insurances. Migration flows, investment, trade etc. will be directed towards the major metropolises and urban agglomerations, both in Europe as well as in the neighbouring areas. The demand for SGI will be met by the market. Rural, peripheral, insular, mountainous and outermost areas experience an opposite development: people, human capital, investments, trade etc. are leaving. It is a challenge to maintain the present levels of SGI for the governments in these areas as the market finds them unprofitable.

6. Question 3 The policy challenge ahead is not only about solving the financial problems in some EU member countries. An even bigger challenge is found in the attempts at resuscitation of the policy on economic, social and territorial cohesion. Although the financing issue may be solved in the medium-term, the political will of subsidiary and solidarity between the EU members may be more difficult to re-establish. During the current on-going economic and financial crisis it has become clear that several EU members do not have the financial resource to maintain the present provision of Services of General Interest in general, and especially Social Services of General Interest. Many SGI are critical to the delivery of the modern welfare state. If the national governments cannot uphold and guarantee a minimum provision of Social Services of General Interest, who can? This development challenges the notion of a ‘Social Contract’ in Europe as well as in the neighbouring countries. An opportunity to smoothen the transition and increase integration with the neighbouring regions in especially south-east Europe, the European Union may take efforts to spread its basic idea of social model. Many opportunities are found in relation to environmental sustainability, including carbon neutral cities, energy consumption and transport . These are based upon place based strategies both in the EU as well as in the neighbouring countries. Cooperation around Services of General Economic Interest is a keyword.