FISTERA (‘Foresight on Information Society Technologies (IST) in the European Research Area’) is a thematic network. It was launched by DG Information Society to support the creation of a European Research Area (ERA) in IST by providing new elements for the definition of a European vision and approach in the field. The network aims to understand the key factors driving IST in a future Europe. FISTERA reviews the current literature and carries out its own research on a range of IST issues in order to feed the discussion on gaps and paths towards the Lisbon Objectives (2010) and beyond. One of its main aims is to elaborate options on how to strengthen Europe’s position in crucial IST areas. The analysis of Information Society development presented in this report distinguishes between “Information Society Technologies” (IST) and “Information and Communication Technologies” (ICT). The term “IST” refers mainly to the societal reality of these technologies, whereas the term “ICT” refers to their production, services and industrial sector. FISTERA starts by identifying and understanding trends, drivers and challenges - more generally speaking, key factor - which will influence future IST development and deployment. Europe’s position is then discussed with regard to these “influencing factors”, in order to answer questions like: What are the elements of Europe’s strengths and weaknesses in ICT as compared to its global competitors? What are the opportunities, threats and challenges for Europe? What should be done to improve Europe’s situation?