Strategic Foresight for Sustainable Development in the European Union: The Role of Entrepreneurship

Abstract

Sustainable development has become a strategic priority for the European Union (EU), requiring coordinated institutional, economic and entrepreneurial transformations. While a growing body of literature recognises entrepreneurship as an important mechanism for advancing sustainability objectives, empirical evidence on how structural features of the business environment influence sustainability trajectories at the macroeconomic level remains fragmented. In particular, the dynamic relationships among sustainable development, business regulation and market openness across EU countries remain insufficiently understood. The objective of this study is to analyse how business regulation and market openness influence entrepreneurship-driven progress towards sustainable development in the European Union and to examine the dynamic interactions among these institutional and economic dimensions. The empirical analysis employs an annual panel dataset covering 27 EU member states for the period 2010–2024. The study applies a panel vector autoregression (PVAR) framework combined with Granger causality testing and impulse response analysis to capture short-run and long-run relationships among sustainable development, regulatory quality and market openness. The results reveal strong persistence and path dependence in sustainable development trajectories. Business regulation does not exert statistically significant short-term effects on sustainability outcomes. Conversely, sustainable development Granger-causes changes in regulatory quality, indicating feedback processes in which sustainability progress stimulates institutional adaptation. Market openness demonstrates the strongest long-term positive effect on sustainability, although short-term impacts appear negative, reflecting transitional adjustment costs. These findings suggest that sustainable development, regulatory quality and market openness form a dynamically interconnected system characterised by temporal asymmetries and feedback effects. The results highlight the importance of gradual, learning-based regulatory reforms and deeper integration into global innovation and investment networks to support sustainable entrepreneurial ecosystems in the European Union. The study also acknowledges limitations related to the selected indicators and modelling framework, which provide avenues for further research.