The Old World and the New Technologies

COMMISSION OF THE EUROPEAN COMMUNITIES The Old World and the new technologies Challenges to Europe in a hostile world by M. GODET and O. RUYSSEN In collaboration with the other members of the FAST team: Riccardo Petrella, Mark Cantley, Olav Holst, Roland Hiiber THE EUROPEAN PERSPECTIVES SERIES BRUSSELS This publication was prepared outside thc Commission of the European Communities. The opinions expressed in it are those of the authors alone; in no circumstances should they be takcn as an authoritativc statement of thc views of the Commission. The French original version is published under the titte: L'Europe en mutation. The English édition is a version adapted by Christopher Huhne. This publication is also availablc in DA ISBN 92-825-1724-1 DE ISBN92-825-1725-X FR ISBN 92-825-1727-6 IT ISBN 92-825-1728-4 NL ISBN 92-825-1729-2 ES ISBN 92-825-1730-6 GR ISBN 92-825-1731-4 PT ISBN 92-825-1732-2 Cataloguing data can be found at the end of this publication Luxembourg: Office for Officiai Publications of the European Communities, 1981 ISBN 92-825-1726-8 Catalogue number; CB-3O-8O-I!6-EN-C © ECSC - EEC - EAEC, Brussels. Luxembourg, 1980 Printed in Iialy Préface We are living in an âge ofincreasing uncertainty, and its dangers are no more clearty demonstrated tkan by the energy issue. Forecasting is more necessary than ever as we hâve to take décisions today that will condition the future. The report 'The Old World and the new technologies ' attempts to iden- tify the future prospects and problems that could qffect the long-terni development of the Community. As one of the first products of the FAST programme, it considers today's and tomorrow's problems in the areas of energy and employment, together with two developments which could rad- ically transform our society in the coming décades: first, the increasing need for information in our society, and the ability of new electronic technology to satisfy it, and second, the révolution in the technoiogical application of biochemistry. It is clearly vital for Europe to develop its technoiogical potential if it wishes to shape its own future in an increasingly dangerous world: that is the central message of the report. We in Europe must take up the challenge of the new industries. We are dépendent on outside sources for 55% of our energy and 75% ofour raw materials. Our major resource is our skill. We need to make an enormous technoiogical effort to safeguard our économie and political independence. The play of market forces has in the past entailed substantial technoiogical progress but the market alone will be insujficient to meet thèse new challenges. The long delays and the vast scale in new investment projects, combined with rapidly changing needs for new skills which only State éducation can meet, require a more active approach than in the past to encourage Jas ter technoiogical development. One example is the pro- motion of new sources of energy, which are an essential factor for growth and offer a way of cutting down European oil imports. GUIDO BRUNNER Member of the Commission of the European Communities Foreword In a décision of 25 July 1978, the Council of Ministers of the European Communities assigned several objectives to the FAST programme. The main one was 'to highlight the prospects, problems and potential conflicts likely to affect the long-term development of the Community and to define alternative courses of Community research and deveiopment' in order to help solve the problems or to bring the prospects nearer to con- crète realization. The présent work is therefore a wide-ranging assessment of the challenges facing Europe. This is in fact the underlying principle on whîch the FAST team has based its research programme. The report begins by evaluating the changes that hâve taken place since we left the 'old' world to enter the 'new' at the start of the 1970s. We hâve devoted particular attention to the crises and challenges facing Europe in the économie, industriai and energy sectors. In addition, in view of the internai and external changes that are taking place, it was necessary to examine the question of the décline and renaissance of Europe. The increasing disparities between European countries could shake the foundations of the Community and this considération has led us to try to establish a diagnosis as to what are Europe's strengths and weaknesses as it prépares to confront the challenges of the future. The final section of the report examines the prospects for technological development and advance, the mastery of which will détermine Europe's capacity to meet thèse challenges successfully. This foreword would not be complète without the following comments: — the conclusions of this report are not in any way to be interpreted as recommendations emanating from the European Commission: they are the soie responsibility of the authors, who hâve no other pretension than to stimulate discussion. — the object of this report is not to propose spécifie lines of approach for R&D, but rather to sketch the gênerai environment within which FAST needs to define its own priorities with a view to putting forward alternative orientations for research and development. Since the future remains open and uncertain, this report cannot be a closed book; it will be supplemented, augmented and updated in paralleî with other work done by FAST. Foreword this work could not hâve been done without access to the results of work carried out by the Interfutures1 group, by the Europe 2000 group within France's Commissariat général du Plan, and by the Directorates-General of the European Commission itself. In this last category, we wouid like to thank in particular the various departments of the Directorate-General for Economie and Financial Affairs for their support as weH as for thetr stimulating comments. Interfutures is a prospective group within the OECD which worked for four years (1976-1979) under îhe direction of Jacques Lesourne and which published in 1979 the report Facing the future, mastering the probable and managing tke unpredictable, OECD, Paris 1979. Contents Chapter 1: CHALLENGES TO THE OLD ORDER 9 1.1. Relative décline and the qualitative limits to growth 9 1.2. Criticism of the conventional wisdom 10 1.3. Questions for Europe 13 Chapter 2: THE CRISES: THE ORIGINS, CONSEQUENCES AND CHALLENGES FOR EUROPE 15 2.1. The orîgins of the crises 15 2.2. The end of a superpower-dominated world and the new actors 20 2.3. Winners and losers under the old order 27 2.4. The international monetary disorder 30 2.5. Trade grows., and changes to focus on Europe 37 2.6. Down-market countries with down-market products are vulnérable 45 2.7. The energy disarray: Import dependence and price hikes 58 2.8. Raw materials shortages? 64 2.9. Full employment and productivity: More jobs are saved with the new technologies 73 Chapter 3: THE DECLINE AND RENAISSANCE OF EUROPE 81 3.1. Europe: Economie superpower, political dwarf 81 3.2. Divergence and convergence amongst the European countries 88 Chapter 4: A CRISIS OF CONFIDENCE IN GROWTH AND SCIENCE 101 4.1. Science: The growth factor 102 4.2. The costs of success: Technology on trial? 103 4.3. The conflict for the control of change 106 4.4. The yields of technology 107 4.5. The need for technological devetopment; conséquences for employment 110 Contents Chapter 5: THE MAJOR TECHNOLOGICAL CHANGES IN THE NEXT FEW DECADES 115 5.1. The technology of information 115 5.2. The bio-technoiogical révolution 120 5.3. Energy 124 5.4. Challenges and uncertainties 125 5.5. R&D efforts: Developments and trends 127 5.6. Implications for Europe 129 Chapter 6: CONCLUSION: THE MANAGEMENT OF RISK AND THE M ASTER Y OF THE FUTURE 131 6.1. A hostile and turbulent world back-cloth 131 6.2. The constraints on European futures 132 6.3. The promises of technology 134 METHODOLOGICAL ANNEX: DEFINITIONS AND CONCEPTS 139 Part 1. Forecasting - Assessment - Prospective 139 Part 2. The principles of prospective research 140 Part 3. New ways of looking at futures 143 Part 4. The future problems 145 Chapter 1: Challenges to the old order 'Billions of years ago the retreating seas ineluctably cast hundreds of thousands of aquatic créatures on the newly formed shores. Deprived of their normal environment they died, gasping and fighting for one last second of eternity. Only a few of them, happier and better adapted to an amphibious existence, overcame the shock of change... ' '... Those who can adapt themselves will do so; those who cannot manage this will survive in some way at a lower level of devefopment or wiil perish, thrown up on the shores.' Alvin TOFFLER in 'The Future Shock' 1.1. Relative décline and the qualitative limks to growth 1.1.1. The magnitude of the décline A rate of growth double that of today, unemployment at a third or a quarter of présent levels, and price inflation of a few per cent each year. This is the image of the 'paradise of the 1960s' which the nine countries of the Community, like the other industrialized countries, hâve lost and which they are far from regaining: — Slow growth. The average rate of économie growth in 1979 was 3.3% as against 1.8% per year during the years 1974-77, but 4.6% per year between 1960 and 1970. — Worsening unemployment. There are now, on average, 6 million un- employed, as against 2.1 million between 1960 and J970. — High inflation.

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