Two years into the Russian war of aggression against Ukraine, any return to peace and stability in Europe appears further away than ever. Instead, its global political, economic, and social consequences became even more apparent in 2023. In the shadow of this war, new violent conflicts also erupted in the Caucasus and the Middle East – at a time when inflation and tight public budgets are fuelling new distribution conflicts in foreign, security, and development policy. This raises a particularly pressing question: how and where can a polycrisis-plagued Europe still have an impact?

The supposed predominance of Western models of society is history, yet no new bi- or multipolar system has emerged to date. What form will a transformed international order take, and what role can Europe play in this context? This is the focus not only of the 2023-approved Re:Order project that we launched jointly with the European Council of Foreign Relations, but also of a first cooperation on geopolitics and geoeconomics with the Africa Policy Research Institute. Besides new perspectives, what is needed are innovative, multilateral, and cross-sectoral solutions, for example in the fight against climate change or hunger. We continue to work on this subject matter with the Istituto Affari Internazionali, the Center for American Progress, and the Center for Climate Security.

Constructive relations between Europe and China have long ceased to be a bilateral matter, given how large Beijing’s global footprint and how bold its ambitions have become. It is only logical that we have given the work of the Mercator Institute for China Studies a new and solid footing in 2023. In 2024, we will be celebrating the tenth anniversary of our Beijing office.

Last year and during the past months, it has become clear in the EU and many candidate countries – including our key focus country of Turkey – that a resilient civil society can make a difference at the ballot box, too. This is always the case when civil society succeeds in forging broad-ranging societal and transnational alliances. We will continue to make our contribution to this in the super election year 2024.

2023 was the hottest year since weather records began. We seem to be getting used to beating this dubious record every year. That said, we should not accept it, as the consequences of the climate crisis and the associated changes to our environment will largely determine the economic and social risks of the next decade.

These are now acknowledged facts, especially in the business world. It is no surprise then that increasing efforts are being undertaken to decarbonize and defossilize business models and production processes. One problem we still face, is how to finance such corporate transformations. This is why we redoubled our activities last year to support the development of a climate-compatible business and finance system with a multi-million-euro program. We want to ensure that public and private investments are increasingly orientated towards the sustainability of economic activity and have a guiding effect towards climate protection.

2023 was also a year that confronted us with the difficulties involved in implementing climate change mitigation measures, as we now have to deal with the harsh reality of conflicting goals and questions of fairness amid the heating and transport transition. We are therefore delighted that several trade unions and special interest groups have expressed a desire to collaborate more closely on issues relating to a social climate policy. We were able to jointly launch a major programme with the trade unions IG Metall, IG Bergbau, Chemie, Energie and ver.di aimed at identifying synergies between climate action, competitivity, and measures to safeguard good jobs.

If we want to prevent the most serious consequences of the climate crisis, we will increasingly have to recirculate carbon and actively remove it from the atmosphere. Only sluggish progress is being made with the debate about this kind of carbon management in Germany. A project run jointly with the Zentrum Liberale Moderne (Center for Liberal Modernity) aims to revive this debate by exploring the various dimensions and need for regulation with stakeholders from different areas of society.

We were particularly pleased to hear from the Joint Science Conference of the federal government and states that our partner Mercator Research Institute on Global Commons and Climate Change (MCC) will receive permanent public research funding from 2025. We see this as confirmation of our strategy of supporting partners that develop non-partisan and evidence-based solutions to pressing societal problems.

2023 was a remarkable year for artificial intelligence (AI). By November 2022, the company OpenAI had already made its ChatGPT language assistant freely accessible. Within two months, it was being used by 100 million people, making it the world’s fastest-growing application. It gave many people the chance to acquire first-hand experience of such tools and to understand the fundamental changes being brought about by AI technologies.

In the context of the Russian war of aggression, it became clear in 2023 how digital communication platforms can be used for the targeted dissemination of disinformation and to weaken democratic processes. Platform companies with business models based on the attention economy benefit directly when particularly extreme content is spread. However, more and more people realize that social media are by no means neutral communication spaces but use their algorithms to reinforce specific content – and in many cases, platform companies do not fulfil their duty of care in this respect.

2023 was a year of political reaction to these developments. In Europe and its member states, authorities set to work to put in place the Digital Services Act (DSA) and the Digital Markets Act (DMA). The discussion on the AI Act entered a critical phase.

In our thematic field of Digital Society, we have been helping civil society organizations become more professional, contribute to digital policy debates, and strengthen democratic rights and values. Our work also focuses on supporting science and translating research findings into actionable knowledge for stakeholders in politics and practice. We launched a framework program to implement the Digital Services Act and initiated projects worth three million euros in 2023. These projects aim to concretise the requirements of the law, accompany discussions of related legal acts, maintain political pressure to act, and empower users to exercise their new rights.

One highlight was the launch event for our newly founded think tank Agora Digitale Transformation (Agora Digital Transformation), which concentrates on the digital transformation of the state. After all, only a public sector that understands and takes advantage of digitization can remain capable of action and increase the degree to which citizens have trust and confidence in democracy. This is also why in 2023 we funded interdisciplinary research and civil society work on sustainable smart cities and the collaboration between the state and social innovators, as well as comparative research on digital participation formats.

Germany continues to face multiple crises: many people are very concerned about the wars in Europe and the Middle East, rising inflation, climate change, growing migration, or the lack of prospects. And many increasingly feel that they are no longer able to take full advantage of our country’s social, political, and economic resources. Consequently, polarization in society is becoming more pronounced, social cohesion is crumbling, and trust in democracy is diminishing. At times like this, it is vital for people to feel that they are involved in political and social life, that they belong to a community, and have fair participation opportunities in this country.

In 2023, we therefore focused our work on strengthening the key elements of our strategy: promoting the labour market participation of socio-economically disadvantaged people and migrants, as well as fostering their integration at the local level. We also concentrated on improving social cohesion through greater representation and involvement, as well as critically reflecting on how diversity is dealt with in power-sensitive sectors such as the police force or education system.

For the project “Mehr als vier Wände“(„More than Four Walls”), we have teamed up with the University of Hildesheim and many municipalities throughout Germany to develop innovative ideas for accommodation for refugees that is future-proof, flexible, and consistent with human rights and thus increases their participation in local society. „Dialog stärken – gehört werden, mitreden, mitwirken!“ (“Strengthening dialogue – being heard, having your say, getting involved!”), a project run jointly with Aktion Zivilcourage e.V., aims to foster social cohesion in Eastern Germany. To this end, we offer chaired face-to-face meetings and discussions in dialogue formats. Together with our project partner Chancenwerk e.V., we are committed in the project „Eltern empowern – Diskriminierung abbauen“ (“Empowering parents – reducing discrimination”) to improving the opportunities for marginalised children and young people in the education system. The project highlights ways, in which parents or legal guardians can support their children and deal with disadvantages.