RAND Europe Trends in Focus 2025 | Defence, Youth Crisis and Societal Resilience

Europe in an Era of Radical Uncertainty

The RAND Europe Trends in Focus 2025 report arrives at a moment when European policymakers face what the UK’s 2025 National Security Strategy calls an “era of radical uncertainty.” Prepared for the RAND Europe Foresight Forum, this inaugural edition identifies nine important yet frequently overlooked trends that will shape the United Kingdom and broader Europe over the coming five years. European Commission President Ursula von der Leyen has warned that Europeans feel “the ground shift beneath them,” and the report’s findings underscore why that sentiment resonates so deeply across the continent.

Rather than focusing on the most prominent headlines — the war in Ukraine, energy price spikes, or inflation — the report deliberately spotlights structural shifts that receive insufficient attention. These nine trends are organised into three thematic clusters: balancing security and society, the challenges of a disconnected youth, and building resilience for a changing planet. Each cluster reveals interconnections that demand integrated policy responses rather than siloed thinking. For leaders in government, defence, education, and technology, the implications are both urgent and far-reaching.

This interactive analysis from Libertify’s Interactive Library breaks down the full report into actionable insights, examining how defence economics, youth disengagement, technological disruption, and climate pressures converge to create a uniquely challenging environment for European resilience.

Global Drivers Reshaping the European Landscape

Before diving into the nine specific trends, the RAND Europe report establishes a critical foundation of five global drivers that shape Europe’s strategic environment. Demographic change leads the list: global population growth is slowing, Western Europe and East Asia face accelerating ageing, and Sub-Saharan Africa’s younger population will generate migration flows toward developed nations for decades to come. Urbanisation continues apace, with growing middle classes in Asia transforming consumption patterns and geopolitical influence.

Climate and environmental risks form the second driver, with extreme weather events, sea-level rise, biodiversity loss, and food and water insecurity creating compounding pressures that no single nation can address alone. The third driver — intensifying geopolitical competition — sees an increasingly assertive China, a revanchist Russia, and destabilising actors like Iran and North Korea challenging the rules-based international order. The United States’ strategic pivot toward the Indo-Pacific adds complexity for European allies who can no longer rely on American security guarantees to the same degree.

Economic uncertainty and resource competition represent the fourth driver, with supply chain vulnerabilities exposed during the pandemic now intersecting with critical mineral dependencies for the energy transition. Finally, rapid technological change and global technology fragmentation create divergent standards, regulations, and infrastructure across regions. This fragmentation complicates governance and creates uneven oversight of emerging technologies including artificial intelligence and machine learning that will reshape every sector of the economy.

NATO Defence Spending and the 5% GDP Target

Perhaps the most consequential development highlighted in the RAND Europe Trends in Focus 2025 report is NATO’s July 2025 commitment requiring allies to invest 5% of GDP annually on defence and security-related spending by 2035. This represents a dramatic escalation from the previous 2% target — itself a goal that many European nations had struggled to meet for years. The implications for public finances across the alliance are enormous, and the report argues convincingly that this trend deserves far more scrutiny than it currently receives.

The fiscal context makes this commitment particularly challenging. Average government debt across the Euro area stood at approximately 88% of GDP in early 2025, with France at roughly 114%. Achieving the 5% target will require governments to make stark choices between cutting other spending programmes, raising taxes, or accepting higher levels of public debt. Each option carries significant political and economic risks that extend well beyond the defence sector.

The report also highlights structural problems in defence acquisition systems that could prevent the efficient conversion of increased funding into actual military capability. Fragmented national suppliers and coordination problems across European defence industries mean that simply spending more money does not automatically translate into greater security. As the North Atlantic Treaty Organization itself has acknowledged, procurement reform must accompany budget increases to achieve genuine deterrence effects.

Defence Spending Trade-Offs and Public Finance Pressures

The RAND Europe report presents a nuanced analysis of whether increased defence spending helps or hinders economic growth — and finds the evidence decidedly mixed. Some economists argue that defence investment stimulates aggregate demand, supports high-technology jobs, and drives innovation with civilian spillover effects. Others counter that military expenditure crowds out more productivity-enhancing investment in education, infrastructure, research, and healthcare.

What makes this debate particularly relevant is the scale of the proposed increases. Moving from approximately 2% to 5% of GDP in defence spending over a decade requires either significant reductions in other government programmes or substantial increases in borrowing. The report notes that the UK has already cut overseas development aid to help fund defence — a decision that illustrates the kind of visible trade-offs that generate political friction. When citizens see reduced services in health, education, or social welfare alongside growing defence budgets, public support for military spending can erode rapidly.

The report emphasises that governments must avoid treating defence spending as a “silver bullet” for prosperity. Instead, the case for increased military investment should be framed around the fundamental value of deterrence: a secure international environment is the foundation upon which economic prosperity is built. This requires sophisticated public communication strategies that connect abstract defence concepts to concrete citizen benefits — a challenge that many European governments have yet to master.

Furthermore, the report advocates for multilateral financing models and increased cross-border cooperation to leverage industrial strengths, support innovation, and achieve economies of scale. Rather than each nation building independent defence capabilities, coordinated European procurement could deliver more capability per euro spent while strengthening the continent’s industrial base.

Political Polarisation and AI-Driven Influence Operations

The intersection of increased defence spending and AI-powered disinformation creates what RAND Europe identifies as a potentially dangerous feedback loop. Defence budgets are inherently abstract — citizens cannot easily see or evaluate what their tax contributions purchase in terms of security. This abstraction makes defence spending uniquely vulnerable to manipulation through influence operations, and the advent of generative AI dramatically amplifies this threat.

The report warns that adversaries could deploy AI-generated narratives to exploit existing societal divisions around defence spending. Large language models can produce convincing, targeted content at scale — from social media posts to fake news articles to manipulated video — making it far cheaper and easier to sow discord than to counter it. Russia, in particular, has demonstrated sophisticated information warfare capabilities that could be enhanced exponentially by AI tools.

The policy implications are significant. Governments need coherent, coordinated messaging with allies and targeted communication campaigns to strengthen public support and societal resilience. This means investing in media literacy programmes, strengthening democratic institutions’ ability to combat disinformation, and ensuring that the public discourse around defence spending is grounded in facts rather than susceptible to manipulation. The RAND Corporation has extensively studied these dynamics in its broader research portfolio, and this report synthesises those insights for a European audience.

Civic engagement and social resilience are essential buffers against polarisation. When citizens feel connected to their communities and institutions, they are less susceptible to divisive narratives. The report argues that investment in social cohesion is therefore not separate from defence spending — it is an integral component of national security.

The Disconnected Youth Crisis Across Europe

The second thematic cluster in the RAND Europe Trends in Focus 2025 report addresses what may be the most concerning long-term challenge facing the continent: a generation of young people increasingly disconnected from education, employment, and social institutions. The statistics are stark and demand urgent attention from policymakers across every European nation.

Mental health deterioration among young people has reached crisis proportions. In the United Kingdom, child and adolescent mental health referrals increased by 105% between 2013/14 and 2023/24. Yet the system cannot cope with this surge: only approximately 50% of referred children actually receive treatment. This gap between need and provision has widened precisely as demand has exploded, creating a generation of young people whose mental health challenges go unaddressed.

The funding picture tells an equally troubling story. UK spending on youth services fell by 50% between 2013/14 and 2023/24 — a decade of systematic disinvestment in the infrastructure that supports young people’s development and wellbeing. This occurred against a backdrop of 97% of young people across the EU using the internet daily, with children aged 5–15 in the UK now spending more than five hours per day on social media. The relationship between heavy social media use and worsening mental health outcomes — including higher rates of depression, anxiety, self-harm, and suicide attempts — is supported by growing evidence.

Economic inactivity compounds the problem. The UK’s NEET rate (not in employment, education, or training) for 16–24 year olds rose to 13.4% in 2024. One quarter of economically inactive people who are not working due to health reasons are under 35. School absence levels in England have more than doubled since before the pandemic, exclusions rose 21%, and home schooling increased by 20%. These are not isolated statistics but interconnected symptoms of systemic youth disengagement that will have profound consequences for Europe’s economic competitiveness and social stability. Explore more analyses of societal trends in the Libertify Interactive Library.

Youth Violence and the Social Media Connection

The third trend within the disconnected youth cluster is perhaps the most alarming: children’s increasing involvement in violence. The RAND Europe report presents data showing that in the UK, children aged 10–14 suspected of involvement in violent crime increased by 38% between 2020 and 2023. In the United States, juvenile homicides rose by 65% between 2016 and 2022. In England and Wales specifically, homicides among those aged 13–19 were 64% higher in 2023/24 than in 2013/14.

The report draws connections between these violence statistics and broader societal trends, particularly the role of social media. Online platforms facilitate recruitment into criminal networks, expose young people to radicalising content, and amplify misogynistic narratives that contribute to gender-based violence. Crimes related to violence against women and girls (VAWG) in the UK increased by 37% between 2018 and 2023 — a trend that researchers link partly to the proliferation of misogynistic content through social media channels and online communities.

Social media does not cause youth violence in isolation, but it serves as a powerful accelerant. Platforms create echo chambers that normalise aggressive behaviour, provide tools for coordinating criminal activity, and offer a recruitment pipeline for organised crime networks targeting vulnerable young people. The combination of deteriorating mental health, reduced access to youth services, increasing school absence, and pervasive social media exposure creates a toxic environment where violence becomes a more likely outcome.

The policy response must be multifaceted. The report calls for early intervention on school absenteeism, restored investment in youth services, improved digital safety frameworks, and better research into the long-term impacts of digital media on children’s cognitive, social, and emotional development. The UK Government has begun addressing some of these issues through the Online Safety Act, but the RAND Europe analysis suggests that far more comprehensive action is needed across the continent.

Resilience for a Changing Planet and Health Systems

The third thematic cluster examines how climate change, demographic shifts, and technological advances converge to test Europe’s resilience. Climate impacts — extreme weather, sea-level rise, biodiversity loss, and food and water insecurity — interact with migration pressures and disease risks to create compounding challenges that stress governance systems designed for a more stable era.

Health systems face a dual pressure. On one side, ageing populations and chronic disease prevalence drive escalating demand for care. On the other, remarkable advances in life sciences promise transformative treatments but at significant cost. The report highlights breakthroughs in genomic medicine, pharmacogenomics, synthetic biology, regenerative medicine, digital therapeutics, and remote-monitoring technologies including robotic surgery. These innovations offer better prevention, diagnosis, and treatment — but they raise fundamental questions about affordability and equitable access.

Can European health systems afford the novel diagnostics and treatments emerging from these technological advances? The report suggests that without proactive planning, the benefits of medical innovation will accrue primarily to wealthier nations and populations, potentially widening health inequalities both within and between countries. This is particularly concerning given that climate change will disproportionately affect vulnerable communities who already have less access to healthcare.

The energy transition adds another dimension to resilience challenges. Diversifying supply chains, investing in renewable energy and storage technologies, and reducing dependence on critical mineral imports from geopolitical competitors are all essential — but each requires significant capital investment at a time when public finances are already strained by defence commitments and social spending needs.

Technology Governance and AI Opportunities

Technology governance emerges as a cross-cutting theme throughout the RAND Europe Trends in Focus 2025 report. The global technology landscape is fragmenting, with divergent standards, regulations, and infrastructure developing across regions. This fragmentation creates governance gaps that could be exploited by malicious actors while simultaneously hampering the coordination needed to address shared challenges.

Artificial intelligence presents both enormous opportunities and significant risks. On the opportunity side, AI and agentic AI systems offer productivity gains that could help address labour shortages created by ageing populations, improve public service delivery, enhance defence capabilities, and accelerate scientific research. The report notes that AI could create new categories of employment and drive economic growth if properly supported by education and training systems.

However, the risks are equally substantial. Job displacement, widening skills gaps, ethical concerns around autonomous decision-making, and the weaponisation of AI for disinformation all require robust governance frameworks. The report emphasises that lifelong learning and flexible education pathways are critical responses to ensure that technological change does not leave large segments of the population behind — particularly young people who are already disengaging from traditional education.

The European Union’s approach to AI governance through the AI Act represents one attempt to establish regulatory guardrails, but the RAND Europe analysis suggests that technology governance must be more adaptive, internationally coordinated, and evidence-based. Research into the long-term effects of digital technologies on human development and social cohesion should be a priority investment for governments concerned about both competitiveness and societal wellbeing.

Policy Priorities for Building European Resilience

The RAND Europe Trends in Focus 2025 report concludes with a set of interconnected policy priorities that reflect the cross-cutting nature of the challenges identified. Rather than treating defence, youth policy, climate adaptation, and technology governance as separate domains, the report argues for integrated approaches that recognise how these issues reinforce one another.

On defence and security, governments must clearly articulate and advocate the holistic value of deterrence, using coordinated messaging with allies and targeted communication campaigns to strengthen public support. Multilateral financing models should be explored to leverage industrial strengths across Europe, and targeted innovation funding should accelerate capability development while addressing structural procurement shortfalls. Cross-border cooperation in defence production is not merely desirable — it is essential for converting increased spending into genuine military capability.

For youth policy, the report’s recommendations are urgent: restore and expand youth services funding, improve access to mental health treatment, implement early interventions for school absenteeism, and invest in lifelong learning pathways that prepare young people for an AI-transformed labour market. The current trajectory — where mental health referrals double while service funding halves — is simply unsustainable and represents a failure that will compound over decades.

Technology and AI governance require regulatory frameworks that are adaptive enough to keep pace with innovation while robust enough to prevent misuse. This includes specific investment in research on digital media’s impact on children, international coordination on AI safety standards, and mechanisms to ensure equitable access to technological benefits including advanced healthcare. The report stresses that technology fragmentation across global regions makes this coordination both more difficult and more necessary.

Finally, climate resilience and economic strategy must be woven into every policy domain. Supply chain diversification, renewable energy investment, and planning for climate-driven migration are not separate from defence or social policy — they are foundational to both. The most important insight from the RAND Europe Trends in Focus 2025 report may be this: in an era of radical uncertainty, siloed thinking is itself a threat to European security and prosperity. Only integrated, evidence-based policy responses that balance competing demands across defence, society, technology, and climate can build the genuine resilience that Europe needs.