The future of the welfare state

Monday, 15. June 2015

Follow-up conference 2013


The European-style Welfare State offers its citizens services that cannot be provided within the desired scope and quality by private service providers. What is more, the Welfare State tries to compensate for the material inequalities, which came about under market conditions. The structuring of the Welfare State is defined by the country’s taxable economic strength and the political consensus regarding the quality and the quantity of the public common good.

At risk is the financial basis of this system in the wake of globalization and enhanced European integration through the global economic trends, both as a result of the relocation of production sites to low-wage countries as well as recessions, leading to tax losses with simultaneous increase in unemployment figures and thus of social assistance beneficiaries. Further threats are posed by the demographic development (an aging population) and the migration.

All the above factors contribute to the fact that the system of the Welfare State is in acute danger. On the one hand, the political actors in the individual member states are no longer able to respond to global trends in an adequate way. On the other hand, it has become increasingly difficult, even if the need for reform is most obvious, to rally political majorities, for example in the areas of social insurance or pension scheme.

The traditional tools (tax increase, greater burden for the following generations) do not seem to be adequate for future-oriented solutions. Instead, a much broader approach is necessary, geared towards a new relationship of social diversity and economic balance within the Welfare State. Thereby, technological advances will have to be combined with social innovation.

During a workshop of June 15-20, 2015, taking place in the Villa Garbald in Switzerland’s canton of Grisons, the participants have attempted at solutions for the Swiss Welfare State in the following three areas: Health, Mapping next Life, and Productivity/Seniority/Family Life.

Fundamental to the discussion is the insight that the Welfare State cannot be organized in a sustainable manner in the long term as long as its limitations and material foundations are not precisely defined. Some of Switzerland’s characteristic features are considered beneficial for the definition of the future Swiss Welfare State, distinguishing Switzerland from other countries, despite the fact that it has often followed the European development of the Welfare State.

Among these specifics are the high level of confidence in the ability to find viable solutions collectively, the distrust of formal bureaucracy and big government, the decentralization, the participation of large parts of the population in discussions, the flat hierarchies and mutual respect within the society. Switzerland is also equipped with a high-quality education system with some of the world’s leading universities and a society and economy aligned with research and innovation, as well as other important locational advantages such as stability and security, among many others. This should provide a framework efficient enough for meeting the social, demographic and economic challenges and to create an equilibrium of social diversity and economic balance within the new Welfare State.

The Welfare State of the future will base on entirely different technological foundations than the one of the 20th century. This is particularly evident when considering health issues. Over the years, health care has gained an increasingly preventative risk minimization character and factors such as blood pressure and blood fat are already standard measurement parameters for an individual’s health. New technologies will enable more of these measured variables up to the day when more and more individuals show a deviation from the statistical mean value of a “total health” and are therefore, in fact, “ill”. When it comes to these variations from the standard state of health, the new Welfare State has to decide how to balance between a certain measure of constraint and a liberal attitude of self-responsibility.

Immunology formulated the concept of disease tolerance, which may also be applied on the social level in terms of an ideal integration of the individual into a social environment. Keeping a suitable balance of prevention, tolerance and advanced medical care, the aging individuals are enabled to contribute longer actively and in accordance with their abilities to the working world. In order to improve the overall social health medical research must go back to becoming socialized to a larger part as well as being an integral component of the Welfare State, whose citizens – in the view of citizen science – participate actively in monitoring their personal health and take health-promoting actions autonomously.

Given the tremendous amount of data collected in the future, the general practitioner will act as a welfare manager; yet, insurance companies as well will gain potentially dangerous power from this amount of information. The new Welfare State is challenged and has to determine which ones among the new technologies shall become a component of the public health and public health control system. While this will most probably lead to yet another cost increase in the area of prevention, the significantly lower rate of illness and the continuously more expensive treatment methods will offer ample compensation.

The aim of all these measures is to give back more control to the individuals regarding their own lives. Unbridled competition and external determinants have forced many occupational groups to shift their work-life balance to an extreme of work only (self-enslavement), leading to an overall acceleration with the well-known health consequences. Within a Welfare State, individuals should shape their professional lives autonomously and achieve a balance between the external pressure and the personal inclinations and strengths as well as their weaknesses and potential health or age-related conditions, so that they can contribute optimally to the common good and finally, at large, lead a full life.

Career paths can thus be designed in more open and flexible ways and age-related opportunities or restrictions can be considered, so that non-compliant careers do not result in exclusions. Lastly, activities in the service of the common good without financial compensation must be promoted and become rooted in the society in terms of esteem and recognition.

In the light of medical progress, targeted prevention and modern, more individualized life designs characterized by increased mobility and activity, seniority is expected to account for about one third of an individual’s lifetime in the future. This group will become a very influential part of society. Beyond the issues of how to finance social and health costs, society will be faced with problems relating to politics and infrastructure as well. The influx of specialized workers from abroad may keep the balance to a certain extent between the ratio of pensioners and pensions financing groups.

Nonetheless, it will also be necessary to exploit further potentialities, among which are unquestionably the – often better-qualified – women, but likewise the elderly. A prerequisite is, however, a departure from the classical linear career paths, enabling more individualized life cycles. These considerations must moreover incorporate other aspects; societal ones such as the preservation and reconstruction of a social environment in old age, the design of new family models, but also the construction of cities and infrastructure appropriate to the needs of elder people. Although it may not be the primary object, inequality issues – of both material and social nature – can be specifically controverted at the same time by an active policy.

Donators and Partners

The ETH Board is responsible for the strategic leadership of the ETH domain and assumes the supervision of its institutions. Its close relationship with the ETH Council has contributed to the successful continuation of Academia Engelberg Foundation since 2000.

The Foundation promotes research into the connecting human fundamentals of science. Academia Engelberg Foundation and the Foundation for Basic Research in Human Sciences have entered into a cooperation agreement for the period 2011 to 2015.

Helvetia is a quality-oriented comprehensive insurance company with over 150 years of experience. Academia Engelberg Foundation is convinced it will be able to use important synergies from the partnership starting in 2015.

A partnership with the University of Lucerne has existed since summer 2013. Since 2016 we have also a parthership with the Faculty of Economics and Management of the University of Lucerne. Through these partnerships, synergies are used and joint projects are tested and realized. The University of Lucerne currently consists of three faculties: the faculties for Theology, Culture and Social Sciences, and Law.