Socioeconomic development: diversity vs. conformity
A successful society is one that benefits from an effective model of socioeconomic development. Generally, there are four models of development based on capitalism in the EU, namely market-oriented, continental, Nordic and southern, which are all being influenced by rapid globalisation. The EU-funded project 'Institutional changes and trajectories of socio-economic development models' (Icatsem) analysed the synergies and trade-offs among the economic, social and environmental dimensions of development within these models. The project looked at how the models evolved over time, focusing on conflicts, complementarities and changes in the socio-political landscape. It also questioned the idea of convergence towards a specific European model, analysing as well the impacts of globalisation and structural reforms sweeping the EU. Through such in-depth study, Icatsem hoped to extrapolate the future of each socioeconomic model. In this context, the team underlined how institutional change is actually determined by political factors reflected in macroeconomic policies, a premise that undermines the prospect of growth based on stability. This has necessitated more understanding of the dynamic links between socio-political determinants and institutional change as well as with social and economic performance. Topics investigated in this respect included weaknesses in the supposed innovation-boosting effect of product market deregulation and the classification of emerging countries into models of capitalism. The project also looked at the trend toward a more liberal form of capitalism. It then studied the weaknesses within capitalism models under current economic strains, as well as the success of individual national models over pan-European ones, particularly with respect to industry. To illustrate, in the European car industry, free trade and common markets have resulted in disequilibrium between carmakers. This has compromised the industry's ability to overcome challenges related to environmental sustainability. Another key finding was that the diversity of models in Europe is still not accounted for and embedded in public policies, despite the fact that the European Commission acknowledges the importance of diversity. Whether diversity or uniformity will dominate the future of the EU from a socioeconomic perspective still remains to be seen. In the meantime, European policies must continue to acknowledge existing diversity and adapt to it, a philosophy which seems to work in Europe's favour. There is certainly strength in diversity.