In the first group proposal, citizen engagement is ensured through reinforcing the European Social Model. It focuses on the support of employees on the one hand, and regional-centric business model on the other. Thus, local employee participation is particularly ensured in foreign data-driven technological companies. These measures should help to overcome the increasing influence of multinational corporations.
The proposal was rooted in the World Wide Gaps TRIGGER scenario, where the weak states are played by high debt, while strong multinational corporations are increasingly replacing the role of the state, and all this leads to a fragmented world with regional inequalities.
To pre-empt this dystopian future, the group proposed to leverage the EU’s biggest competitive advantage which is The European Social Model. This concept typically refers to the degree of employment regulation and social protection in European countries to conditions in the United States. The recommendations of the group developed in a way to employ trends and policies which are already observed today across Europe for a higher employer and local participation from the fringes to the institutionalized policy mainstream.
On the way to reaching this end goal, however, both opportunities for reform, as well as challenges to Europe’s social model are identified and described in the next two passages.
Firstly, business communities show a willingness to go beyond producing goods and services for profits. Their tendency to focus on stakeholder value shows that there is a desire for responsible business and equality. Secondly, the strong industrial culture activism makes Europe the prime candidate for bringing labour unions into the digital era. This together can counteract the multinational corporations – the main challenge looming over Europe.
However, there are some challenges. It is safe to say that the EU missed the tech wave: Amazon, Netflix, Alibaba, Google, Facebook — none of these are European companies. This leads to a difference in values. When push comes to shove, can Europe count on Alibaba or Facebook to respect European labour values? How can it maximize its influence on corporate decisions? So, the long-term question is how do we incentivize foreign companies to protect and respect European values when operating in the EU market.
And the answer is by supporting employee and region-centric business models.
In a world increasingly dependent on data-driven technology, it is crucial to emphasize the role of employees in the development of these digital models. Hence, particularly in foreign data-driven technological companies, local employee participation is ensured.
The group have proposed two mechanisms to enable this:
- Increasing employee representation: to ensure the respect of European labour rights such as working hours, subsidies, income disparities, etc.
- Increase of local representation: competent local NGOs, as well as community and municipality representatives, should be able to defend: for example, protection of local environmental resources, restructure of the urban environment
The strength of this recommendation is that it draws on existing trends, taking the existing employee and region-centric business models and institutionalizing them on a European level.
There is an ongoing movement to reshape company values from shareholder value to stakeholder value. This has even been proposed in the European Commission’s Industry 5.0 strategy. A means to institutionalizing is requiring:
- up to 50% board representation by an employee and regional representatives for companies of 2000 employees. Which is already in place in Germany under the co-determination law.
- This employee and region-centric policy will ensure the integration of Environmental, Social, and Governance commitments are respected as KPIs in corporate performance reporting.
Due to the lack of European companies in the front-line of the global digital revolution, in the future, there might be fewer incentives for foreign companies to protect and respect European values when operating in the EU market. Therefore, the group suggests that the EU must make employee- and region-centric business models the norm across Europe. Just like the EU has pioneered the fight for data privacy, it is now time for the EU to leverage its biggest competitive advantage, its social model by being a role model in paving the new way of leadership in the digital era.
Recommendations by:
- Dario Moreira, University of Oxford
- Alliance Niyigena, The University of Edinburgh
- Marlene Straub, Oxford Internet Institute
- Francisco José López Vélez, Stockholm University
