Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
/ The 4th International Seville Conference on Future-Oriented Technology Analysis (FTA):12 & 13 May 2011
FTA and Grand Societal Challenges:
Shaping and Driving Structural and Systemic Transformations
Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
Authors: / Janne Engblom, Satu-Päivi Kantola & Jari Kaivo-ojaCorresponding address: D.Sc. (Econ. & Bus. Adm.) , M.Sc. (Statistics), Senior Lecturer, FRRC Special expert Janne Engblom, Turku School of Economics, University of Turku, Rehtorinpellonkatu 3, 20500Turku, Finland, Email:
Sponsors: / European Union DD Industry and Enterprise, INNOVA Europe, Finland Futures Research Centre and Turku School of Economics, University of Turku
Type: / European foresight study
Geographic Coverage: / Europe
Scope: / Future consumption structures of Europe and sub-regions
Applied Methods: / Statistical methods, generation analysis, scenario analysis
Evaluation:Impacts: / Fully
The study describes the futures consumption structures of European Union and Turkey before the year 2030.
Organiser: / Dr Jari Kaivo-oja, Research Director Finland Futures Research Centre, University of Turku
Duration: / 1.1.2009-30.9.2010 / Budget: / 150000 (estimation, this study) / Time Horizon: / 2030 / Date of Brief: May 2011
Keywords: / Baseline scenario analysis, consumption structures, trend analyses, generation analysis, the European Union, consumer-driven innovation policy, scaling-up innovation strategybased on the generation analysis
Purpose
The study contributes to one key theme of the conference: Building FTA capacities for systemic and structural transformations. The study of consumption behaviour has always had a large share of the attention of consumer researchers. The main interest in demand studies comes from producers rather than consumers. The uncertainty in future demand for products and services is appallingly large, by any statistical test. However, the future of European consumption structures needs to be analyzed. This study provides a detailed scenario analysis of European consumption structures. In the study historical trend analysis of European consumption structures is provided for the years 1998- 2008. The future time horizon of the study is till the year 2030. Linear forecasts were estimated for years 2010, 2015, 2020, 2025 and 2030.
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
Background & Context
The aim of this report of the study on “EU consumer preferences in 2030” (ECP2030), is to provide quantitative trends of consumer preferences in 2030. In the following chapters a series of projections is shown and analyzed, with a view to develop backup strategies in uncertain times. Purpose of this report is to compare consumption between different regions of European Union and between different age cohorts. Forecasts for years 2010-2030 are calculated based on time series data of 1998-2008. Forecasts are calculated based on linear models and also using different scenarios of total consumption in 2010-2030. As framework scenario model was IFs model.
The goal is to assess consumption in different regions in EU. Countries are grouped into four geographic regions. In addition European Union is examined as a whole. Finally, European Union and Turkey together are analyzed. What were the most important reasons for having launched the FTA exercise?
First geographic region “EU North” includes three Nordic countries. Region “EU East” has 10 more or less new members of European Union from East Europe. Third region includes BENELUX-countries, Great Britain and Ireland, France, Germany and Austria. Rest of members of EU belong to the fourth region “EU South”. Regions are fully described Table 1.
Table 1. Regions of Europe in the study are:
EU North: Denmark, Finland, Sweden
EU East: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia
EU Northwest:Austria, Belgium, France, Germany, Ireland, Luxembourg, Netherlands, United Kingdom
EU South:Cyprus, Greece, Italy, Malta, Portugal, and Spain
EU 27: All 27 EU countries
EU27+Turkey: All 27 EU countries and Turkey.
Separate descriptive and time series analysis is conducted for different European regions. Main goal of the analysis was to compare consumption divided into twelve groups (purposes of consumption) in 2008 and forecasts for 2010-2030. In the study forecasts are calculated using time series data from 1998-2008. The data and method of analysis is described in next main chapter.
The basic motivation and reason for the study was to provide better knowledge base for consumer-driven science, technology and innovation (STI) policy in the European Union. The foresight process was expert-driven and data/evidence based. Multidisciplinary approaches were utilized. The basic methodology was quantitative and based on basic statistical forecasting tools. Some qualitative analyses were also utilized.
Here an empirical example of consumption structures analyses
Figure 1.Consumption structure of Generation X in the year 2030.
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
FTA Process
The exercise was dealing with the future consumption structures of the European Union with special reference to demographic generations. This was one main focus. Consumption-driven innovation policy in Europe needs this kind of basic information. The objectives were connected to better knowledge base of European innovation policy and consumption changes and dynamics. The project team was based of professional expertise in the field of consumption and marketing research and statistics. There are many potential users of the results: all stakeholders interested about future consumption of European Union and its key regions. Approach was including both bottom-up and top-down approaches. This project was not focused on participation, more on basic consumption research and quantitative scenarios. There was Workshop in the Brussels with 12 top-level experts, who commented the study and gave some suggestions
Methodology was a combination of statistical scenario analysis, generation studies and consumption research.
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
Output & Impacts
Generally, we can conclude that there are considerable differences, but also some unified consumption fields (food, housing, health and miscellaneous goods and services) in future consumption structure developments in different European regions. This major observation will surely have its own STI policy consequences. Scenario analyses of the report give us more detailed futures images of European regions. Here in this summary section we do not go into details of the presented analyses.
One key observation is that North Europe and West Europe seem to have much more resources for consumption than East and South Europe. There is a large consumption gap in Europe, which needs new STI policies and policy formulations.
In the scenario analysis, the forecasts were computed for groups of different purposes of consumption (COICOP), for five EU regions. Three different scenarios were given: baseline, markets first and sustainability first.
The forecast period was 20 years, from 2010 ending at 2030. In all scenarios for different COICOP groups and different regions, the markets first scenario shows the most rapid growth of consumption and the growth is slowest in the sustainability first scenario. Considered by regions, the consumption per capita is highest in EU North, and lowest in EU East throughout the forecasting period of 2010-2030, in every COICOP group.
We point out that European STI policymakers need this kind of consumption structure analysis to perform more rational consumer-driven innovation policies in the European Union.
A very promising approach is to develop innovation scaling-up strategies for different generations (population age structures). Although no consensus definition of ‘‘scale-up’’ exists in the literature, there is general agreement among researchers and practitioners that scaling-up does not simply refer to increasing the number of service-delivery points in any given place. Rather, scaling innovations is an interactive innovation diffusion process in which different stakeholders participate to ensure that innovations have a deep and broad based impact and are sustainable over time. This kind of novel innovation strategy approach provides new promising STI perspectives for the European Union.
There was a success indicator and it was met. The needed analyses were produced. The output met the presented expectations and objectives. The results are taken into consideration in the future STI policies of the European Union. The EU DG Industry and Enterprise does it. Various policy recommendations were given the client. The research team produced a detailed policy recommendation document for the client (25 pages). The methodology was fixed beforehand so the client got what was ordered. The obtained results are relevant for all the stakeholders working with consumption structures. The results were evaluated to be policy-relevant in the community. The study met the expectations, which were quite high. This report is just a part of the whole study.
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
Outcome & Evaluation
ThisFTAstudy was designed to create recommendations for all the STI policy makers of the European Union. The study is giving insights to policymakers how consumption structures are changing in the Europe if baseline scenario is realized. This scenario can be used as a benchmark to other possible consumption structure analyses. The study reveals that without scenarios of consumption structures, scaling up strategy of innovation policy in the European Union has a vague starting point.
One key policy implication of this study is that in the future consumption trend analyses should be an elementary part of European science, technology and innovation (STI) policies. We need to combine “supply side logic” to “demand side logic” of European STI policies. For the European innovation policy, all changes in consumer markets create new challenges.
New product and service concepts can be developed by the Lead User Methods of each consumer generation. Lead users are an extremely valuable cluster of customers and potential customers who can contribute to the identification of future opportunities and evaluation of emerging concepts. Understanding these users may provide richness of information relatively efficiently. In this study we have provided a basic analysis of generational differences of consumption structures in Europe.
It is important to understand that structural analyses of future consumption patterns help us to evaluate the possible scaling challenges of new innovations, whether they are technical, business or social innovations. Scaling new innovations is needed in many innovation processes and many European industrial and service clusters.
Key variables were based on main consumption categories of the Eurostat´s consumption statistics. This makes the study valuable and other analyses easier to make. The foresight team got a lot of feedback and guidance and many modifications were made.
A detailed research paper will be available for interested professionals and stakeholders.
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Baseline Scenario Analysis of the European Consumption Structures before the Year 2030: Towards better Scaling Up Strategies of Consumption-driven Innovations
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