Preparing Europe for the Future: The Current Geopolitical Outlook and Policy Solutions for Business Resilience
From data privacy to energy security to trade and supply chain issues, how can the European Union remain at the forefront of global policy and industry development? And what do policy and public affairs leaders need to prioritize in today’s shifting geopolitical landscape?
To discuss these and other questions, the FiscalNote Executive Institute hosted, “Preparing Europe for the Future: The Current Geopolitical Outlook and Policy Solutions for Business Resilience,” an invitation-only gathering at the Brussels Press Club on October 3. Featured speakers included:
- Susan Danger, CEO, American Chamber of Commerce to the EU
- Marcel Halma, SVP Communications, Government & Public Affairs and DEI, Solvay
- Nathalie Errard, SVP Head of Europe and NATO Affairs, Airbus
- Josh Haecker, CEO, Predata, and Head of Product, Geopolitical and Market Intelligence, FiscalNote
Below are some key takeaways from the discussion.
Tips for Europe
- Understand how you’re perceived. International surveys indicate that the EU is perceived to have stable, but relatively low influence on global affairs — compared to a high, but declining influence for the U.S. and a big rise in influence for China.
- Focus on core values. Europe needs to do a better job of defining its values and then publicizing them globally. Yet it shouldn’t forget, either, that standing up for one’s values on the world stage often requires sacrifice, financial or otherwise.
- Foster unity. The single market, in particular, will struggle to survive a divided Europe.
- Partner up. A strong trans-Atlantic partnership is needed more than ever.
- Tackle economic weaknesses. These include: slow GDP growth, burdensome regulation, significantly lower incomes than in the U.S., labor shortages, skills shortages, sluggish investment, and rising protectionism.
- Stay optimistic. Few people follow pessimistic leaders.
- Be ambitious. If you don’t aim high, you’ll always deliver low.
- Spend on defense. The EU won’t ever be a true superpower without a credible military budget.
- Regulate smartly. Predictable rules — for green transformation and elsewhere — that pass cost-benefit analysis are essential for long-term business planning and investment.
Age of artificial intelligence
- Knowledge economy. Generative AI is democratizing access to many previously high-tech tasks. Yet overuse of AI could eliminate entry-level jobs that are stepping stones to better-paid jobs. And whereas manual jobs were most vulnerable to automation in the past, many knowledge-heavy jobs are now on the front lines of automation.
- National security. In addition to its many benefits, AI is a new tool to sway and manipulate voters, including by “micro-targeting”, greatly expanding the quantity of misinformation, and by further undermining trust in democratic institutions.
- AI regulation. The EU is being proactive on AI regulation, while the U.S. is paralyzed by gridlock. The Council of Europe, for example, is drafting guidelines to encourage the ethical use of AI.
- Intersection with environmental regulation. This area can’t overlooked as many of the critical raw materials and resources needed to complete the digital transformation in the EU rely on environmental considerations, with scarcity examples around water, i.e., for production of chips and semiconductors, and lithium, i.e., for the production of batteries for certain tech products.
Environmental, social, governance
- Scrutiny of ESG is rising. As a result, corporate “greenwashing” will become harder, as companies’ supply chains — and public statements — are scrutinized more closely by activists and regulators alike.
- Prepare for tougher regulation. Companies will also have to take care to avoid getting caught in the diverging regulatory crosshairs of China, the EU, and the U.S.
- Turn it to your advantage. Companies that anticipate and respond to looming ESG regulation can turn their foresight into a competitive advantage.
- Help please. Because many ESG-inspired corporate initiatives and investment are still unprofitable, more government support and incentives may be needed.
- Upstart advantage. Unburdened by legacy infrastructure, young companies can often leapfrog incumbents to more easily meet tougher ESG standards.
- Up and down. Changing market conditions will make ESG-focused investment more or less attractive at different moments in time.
Tests to resilience
- Geopolitical risks. These are, says Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase, the greatest current threat to both his bank and many other multinationals.
- Downside of consensus. Brussels’ consensus-driven politics can make tackling Europe’s big policy challenges even harder.
- Deglobalization advances. Supply chains are becoming less efficient and more costly as the world economy grows less open.
- Water crisis. The growing scarcity of potable water is a neglected geopolitical time bomb.