Policy Drivers in the Twin Transition

One of the key objectives of the ST4TE project is to understand how inequalities influence policies for the green, digital, and twin transitions, and in turn, how policies influence inequalities. To tackle this, a task led by EFIS Centre focuses on understanding the various drivers of the twin transition (the so-called policy drivers) and measuring progress in European regions to identify regional readiness and potential vulnerabilities. The task also explores how different interventions throughout the policy cycle can widen or reduce inequalities. Ultimately, ST4TE aims to uncover how the design and implementation of policies for different transitions can reinforce or mitigate each other's effects.

Case studies

Over the next year, three partners – EFIS Centre, the University of Thessaloniki, and the University of Ferrara – will develop six case studies from various European regions, with two case studies for each transition type: green, digital, and twin (both transitions combined).

The selection of the case studies is based on the Transition Performance Index (TPI), developed by the European Commission, and complemented by three other variables: the Digital Economy and Society Index (DESI), the Green Transition indicators of the Single Market Scoreboard, and the Eco-innovation Index (EI). Each case study will focus on a priority topic, such as skills, jobs, income, or intersectional inequalities.

What indexes will be used for the case studies? 

The three indexes provide a comprehensive view of the progress of European Union Member States (EU MS) on the green and digital transitions and serve as a basis for selecting case studies

• The Transition Performance Index (TPI): The TPI measures the transition of the 27 EU MS and 45 other countries across four dimensions – economic, social, environmental and governance – aligning with the EU Policy Agenda and the UN Sustainable Development Goals. It provides a comprehensive overview of a country’s performance in building fair and inclusive societies, meeting the EU Green Deal objectives, enabling sustainable economic growth, and strengthening democratic development. The TPI indicates commendable and relatively rapid progress in the environmental transition among EU and neighbouring countries, with strong performers in the environmental dimension (e.g., UK, Malta, Italy) and the social dimension (e.g., Iceland, Slovenia, Norway), each demonstrating its own “recipe for success.” These findings highlight the importance of a place-based approach to policies.

• The Digital Economy and Society Index (DESI): The DESI is instrumental in monitoring EU MS progress in digital transformation across human capital (digital skills), connectivity (digital infrastructure), integration of digital technology, and digital public services. The 2022 results show Finland, Denmark, the Netherlands, and Sweden as top performers, with Finland investing more than others in digital skills. Greece and Romania lag in digitalisation of public services and digital technology in the business sector. The Women in Digital (WiD) Scoreboard is also relevant, as it measures women's inclusion in digital jobs, careers and entrepreneurship. This scoreboard places Finland and Denmark as top performers for 2022, while Greece, Bulgaria, and Romania are lagging at the bottom of the scoreboard — aligned with the DESI results.

• The Green Transition indicators of the Single Market Scoreboard and the Eco-Innovation Index: The green transition-related indicators of the EU’s Single Market Scoreboard track progress toward the EU Green Deal objectives, focusing on climate neutrality, zero pollution, circular economy transition, and protecting biodiversity. Complementing this, the Eco-innovation Index assesses progress in innovation that reduces environmental impacts, increases resilience to environmental pressures, and uses natural resources more efficiently. This composite indicator considers not only eco-innovation inputs, activities, outputs, and resource efficiency outcomes, but also the positive socio-economic outcomes of such innovations. Between 2013–2022, the Nordic countries, Luxembourg, and Austria ranked as top performers. On socio-economic outcomes, Luxembourg, Austria, and Finland scored particularly high.

Drawing on countries’ performance in the aforementioned indexes, case studies are selected by comparing a top-performing country with a middle- to lower-performing country, each linked to specific focus topics. Based on various sources, the following comparison table has been developed. It presents the score for each index by country and includes a colour code to highlight each country's performance relative to others.

• Green transition: The first case study will focus on the Eco-Social Tax reform in Austria (top-performer). The second one will analyse energy poverty through policies to increase energy efficiency in residential buildings in Lithuania (a middle-performer).

• Digital transition: The first case study will analyse structural problems of the labour market in the Netherlands (top performer), with a prospective analysis of future challenges intersecting migration and youth issues. The second one will analyse the digital skills gap in the manufacturing sector in Portugal (middle-performer) based on Industry 4.0 paradigm.

• Twin transitions: The first case study will focus on the role of bioeconomy in rural areas of Ireland (top-performer). The second one will analyse green and digital skills development in brown industries, looking at areas of industrial transition in Greece (low-performer).

Each case study will present a landscaping analysis, mapping of stakeholders involved in concrete policy initiatives on transitions, alongside an overview of policy design, implementation mechanisms, and impact. In a second step, focus groups with relevant stakeholders will discuss policies and validate the findings, with a focus on emerging challenges, barriers to implementation, and inequalities arising or influencing the process. Finally, an analysis of policy drivers, such as economic dynamics, political constraints, technological developments, legal landscapes, and institutional capacities, will be included. Some guiding questions for analysis will cover: 

• How do existing socio-economic disparities (mainly in terms of income, skills or jobs) influence access to digital and green technologies, infrastructures, and initiatives (e.g. EU funded projects)? 

• What measures are in place within digital and green policies to mitigate potential negative impacts on vulnerable populations and ensure that the benefits are equitably distributed across society? 

• How do regulatory frameworks and incentive structures within digital and green policies contribute to the concentration of wealth and power among a select few, exacerbating socioeconomic inequalities?

• How do digital and green transition policies inadvertently reinforce existing inequalities by favoring certain industries, regions, or demographic groups over others?

As a final step, EFIS Centre will perform a meta-analysis of the findings from all the case studies and present them in a final report. This report will provide a comprehensive overview of (i) the inequalities influencing the policy cycle, (ii) the synergies and mutual effects on policy design, and (iii) the impact of policy mixes on widening or mitigating inequalities. The report will be shared on our website, Zenodo and LinkedIn. This task is expected to be completed by mid-2026.