There are 5 global transformations happening: automation and abundance, BRICs and globalization, climate change and energy, demography, and e-everything. Europe has 3 key resources to address these transformations: the power of the sun, the hearts and minds of Europeans, and the tools of the European Union. However, the key obstacle is that there is no single European political market, which creates asymmetry and moral hazard as national politicians are not incentivized or punished for decisions that help or hurt Europe as a whole. A European political market needs to be created to generate more political will for reforms.

1. Alpbach, 31.8.2010 dr. Žiga Turkprofessor, University of Ljubljana, SloveniaSecretary General, Reflection Group on the Future of EU, Brussels.

2. Contents there are 5globaltransformations we recommend using 3 resources better the key obstacle is we do not have 1 market and I don’t mean the economic market!

3. ABCDE of grand transformations automation and abundance BRICs and globalization climate change and energy demography e-everything

4. A

5. Automation

6. Abundance

7. National Geographic September 2010 spending on “essentials” 30% in USA, 40% in Germany, 70% in Kenya

8. Automation&Abundance: Routine work dissappearingEconomy-wide measures of routine and non-routine task input (US) Mean task input as percentiles of the 1960 task distribution (Levy and Murnane)

9. B

10. ABCDE: GDP in 1500 – (BR)IC

11. ABCDE: GDP 1960

12. ABCDE: GDP Trends

13. C

14. ABCDE: Climate change and energy

15. Sources of Energy in EU

16. D

17. “In the creative knowledge economy of the future, human talent is the ultimate economic resource” Richard Florida

18. World map distorted to global population talent

19. Declining share of EU population talent!

20. “So we will not have the quantity, but we will have the quality” standard EU mantra

21. Shall we? The world is flat! % 1 13 1 27 1. Excluding ISCED 3C short programmes 2. Year of reference 2004 3. Includingsome ISCED 3C short programmes 3. Year of reference 2003.

22. “Europeans want to invest more in research and innovation” DuraoBarroso

23. Do they?

24. Do they?

25. GlobalShare of Scientific Papers

26. Growth in Annual Output in Science

27. E

28. ABCDE: eCommunication

29. …

30. ABCDEare historic … end of industrial, information age, dawn of creative economy end of the dominance of the West end of below ground energy and fossil fuels end of a population growth, youth dominated society end of paper based society, dawn of digital society

31. ABCDE are behind the crisis people worried about old age … saving … (d-demography) BRICs economies saving a lot (absence of social security), savings coming to financial markets in the West … (b-BRICS) where we had no idea what to do with it … (a-abundance) lack of realistic demand, investment instead inflate value of what existed (houses, stock) (a-abundance) and when energy shortage pushed prices of oil up, with it inflation, with it price of money the crisis eruped(c – climate) … thanks to the e-commerce with the speed of light some recovery but unless ABCDE are addressed, there will be no (financially) sustainable recovery

32. ABCDE are global theywillbeaddressedbyglobalplayers governmental intergovernmental business

33. So what can Europe do?

34. Reflection group results in ½ of a tweet1Europe has a choice: reform or decline 1) Tweet = 140 characters

35. A restructure for post industrial society agent of change, trend setter, player build walls for migrants and dams for seas family and immigration friendly embrace digital like we embraced print cherish industrial traditions bunch of passive selfish former superpowers maintain technological and political lead a continent of grumpy old men (an women) defend the ways of paper based society B C D E Europe has choices across ABCDE

36. Europe hasthreeresources Powerof the sun Theheartsandmindsofthe people of Europe The tools of the Union

37. (1) Thesun (obviously)

38. (2) Thepeople

39. “Leaders in the 21st Century will be those that empower others” Bill Gates

40. Empowerment never before in history was so much education, information, knowledge, contact to other people … available to so many neverbeforesuchsmallpercentageofthemworkedforthegovernment

41. This is our advantage in Europe will not have the numbers everybody in the world knows education, innovation is important but we have a culture, tradition, values respect for the individual, freedom, democracy these values empower thesevalues open opportunities, these values made Europe great since 15th century

42. (3) Theunion

43. Report lists dozens of recommendations and many are calling for a European solution but lack of “political will” is the standard excuse for not implementing them so how does one create political will?

44. Politicalwill is created on political market

45. Common Market Underlying the Union, there is a common product, financial, (…) market. Many (…) markets are not complete. But the key problem is the non existence of the European political market.

46. Non existence of European political market … …. creates an asymmetry of reward and punishment and invites moral hazard of the politicians Doing good policies on the European level hardly brings any advantage in the national political market. Doing things that are bad for Europe and perhaps popular at home are punished by no-one in Brussels and rewarded by the home electorate. Alternatives the political market on the European level is created the national political markets depend more on the actions in Brussels.

47. PS.

48. Whenyou are on the top, it seems all pathsleadsdown.

49. Or it may get more crowded at the top … which is in fact more fun!

50. Acknowledgements photos:Google photo search, Flickr, EU, RemKoolHaas … charts:Erste Bank, Stanford University, OECD, WEO, IMF, NASA more information, author contact at www.zTurk.com