Future challenges to shared prosperity: barriers, needs and opportunities Scenario-based analysis on the future impact of digitalisation and globalisation on socio-economic inequality and skill demand : Scenario-based analysis on the future impact of digitalisation and globalisation on socio-economic inequality and skill demand : D7.4

This report examines the implications of four distinct scenarios on inequality and skills demand within the European Union up to 2030. The scenarios are based on potential trends in digital transformation—either stagnation or acceleration—and globalisation—either further globalisation or deglobalisation. Each scenario highlights unique barriers and opportunities for prosperity, socioeconomic equality and skills, necessitating tailored policy responses. The report addresses the increasing complexity of navigating inequality and skills demand in different contexts. It identifies the required responses across various action domains, including education, skills development, labour market regulation, migration and mobility and economic resilience. While some policies can be applied robustly, their effectiveness varies across scenarios, highlighting the importance of adaptive policymaking. Key insights reveal that shifts in skill demands impact diverse groups unevenly in all scenarios, necessitating agile and adaptive reskilling and job-transitioning systems. Furthermore, economic resilience and inequality are closely linked, requiring policies that support small and medium enterprises (SMEs), ensure fair competition, and maintain economic stability. Flexible yet protective labour market regulations are essential to accommodate the evolving nature of work and career transitions. Effective integration of migrant workers can mitigate labour shortages and promote equality, calling for a directed European policy approach. The report also emphasises the critical role of fostering stakeholder cooperation to implement these policies effectively, promote equality and address labour shortages and skill mismatches. By addressing the complex challenges of socioeconomic inequality and skills demands, this report moves the debate forward with a detailed, scenario-based analysis and a robust framework for policy adaptation. In an upcoming report under the GI-NI work package 8, we will expand on these policy implications, developing a more refined and focused policy approach that aligns with and complements existing policy frameworks and governance structures.