Future of Digital Transformation in the European Union 2035

Digital transformation is still at its beginnings. Its full impact is impossible to predict. However, there is a widespread consensus that it will significantly change politics, societies and economies, impacting every single citizen’s life. What will the world we live in look like in the future? The central task for stakeholders from the public and private sector and civil society in the EU and beyond will be to build the future world we want to live in. To do so, they need to be prepared to proactively deal with both the challenges and the opportunities of digital transformation. To help stakeholders formulate robust yet flexible strategies on both of these sides, we have built four scenarios on what digital transformation in the EU could look like in 2035.

While digital transformation is a certainty, the way in which it will unfold and the concrete impact it will have on our lives is one of the most uncertain questions of today. Digital Transformation is impacted by a myriad of different interacting social, political, economic, technological, environmental, legal and military driving forces. To unpack the complex picture resulting from the interaction of these current and future drivers will be one of the key challenges for the EU and its success as a public administration.

Deloitte’s scenario analysis is a methodology that allows us to reduce the complexity of real world developments and to design plausible, relevant and yet challenging alternative futures. Our approach combines decades of experience in scenario analysis, state of the art AI-based systems and human intelligence. Working with an interdisciplinary group of experts, we have developed four scenarios on the future of digital transformation in the EU.
 

Four possible scenarios about the future of digital transformation in the EU

Scenario 1: EUtopia
A united EU has successfully mastered digital transformation and is benefitting socially, politically and economically from its advantages. Due to the technology-enabled freedom of the EU´s digitally literate citizens and its enabling role for both the public and private sector, digital transformation has made Europe thrive, and it has become a global leader in the digital field. The proactive management of digital transformation has also led to an effective containment of its dark side. However, threats remain, and the EU must constantly fight to stay at the helm of change and ensure its own future security and growth.

Scenario 2: EUsed
Only a few European member states have been able to cope with digital transformation. These states are home to innovation hubs and big national tech giants that hold monopolies across the entirety of Europe, providing stable jobs and ensuring a general functioning of the economy by safeguarding the EU from economic decline. However, other global players are in the driving seat of digital transformation, playing the EU like a pawn in the digital game. This inequality between member states is also seen within member states’ societies: while those able to adjust to digitalization have become digital winners, those unable to do so are left behind. This has led to political and economic fragmentation – the EU is at the verge of collapse and is only held together by the dependency of digital losers on digital winners, and the blatant necessity to cooperate on digital issues. In the absence of a strong European Union and a lack of responses from national governments, civil society movements outside of the established political structures provide alternative social and political structures. Equally, parties and organizations at the extreme ends of the political spectrum, particularly the far right, have used this situation to gain political and social influence, and the digital sphere has become a paradise for cyber criminals and a breeding ground for a dark economy.

Scenario 3: EUSSR
The challenges of digital transformation have led to a focus on security within the EU, resulting in a close and strong, but repressive, Union. The EU is thus able to effectively contain the dark side of digital transformation. As a consequence, the EU has become a global leader in digital security. However, with a heavily regulated European market, the EU is dependent on external innovation from global players in other fields. While most EU citizens live comfortably and safely, with a stable job in the public security sector or with international tech giants, opportunities for political participation are almost non-existent. Although certain limitations of freedom are widely accepted as the price for European security, participatory democracy has suffered severely.

Scenario 4: EUniformity
Digital transformation is driven by a strongly united and closely cooperative EU that has successfully managed to strengthen and protect European values and grow closer by focusing on European security as the basis for ensuring peace, freedom and prosperity in the EU. The EU provides the primary political organs and institutions for governance, uniting member states and fulfilling both legislative and executive functions. Through state-driven innovation and strong public-private partnerships, the European economy has become vibrant and is continuing to grow. Due to the high levels of digital security, and EU-wide investments in digital infrastructures and digital literacy, citizens profit from digital transformation and the dark side of digital transformation has been managed effectively and successfully. Nevertheless, in this secure and stable context, a dullness has settled over European politics, making member states more and more uniform and creating more and more dissent across European societies. With political participation possible only through the EU- and state-controlled channels, calls for more political freedom and civil society involvement are becoming louder and louder.