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driven by external modernisation effects. The
welfare state subsequently adjusts to the exter-
nal challenges of Industry 4.0. Here, the ques-
tion of recalibrating society’s internal redistribu-
tion of labour and welfare benefits becomes
one of the key issues. The “Mediterranean”
welfare states of Italy and Spain face the biggest
challenges. Here, on one hand, social inequality
is high and was exacerbated by the effects of
the economic and financial crisis. On the other
hand, external modernisation effects, especially
on the labour market, lead to further stratifica-
tion of these societies. At the same time, system-
atic digitalisation of the welfare state offers great
development potential, especially with regard to
integrating digital technologies into industry,
building human capital and driving digital public
services. Spain, for instance, especially when we
look at health- and care-system, is taking the
route of digitalising public services as a possible
strategy for coping with the consequences of the
economic crisis and with latent modernisation
problems. It is now slowly catching up.
Conclusion
Digitalisation can bring about economic and so-
cial progress as well as equality. But not in each
and every welfare state setting to the same ex-
tent. Here, the scandinavian welfare states
(Sweden, Denmark, Finland) seem to be in a
beneficial position since the internal modernisa-
tion of these welfare states already is on a high-
er level than in most of the liberal, mediterra-
nean, post-socialist and conservative welfare
states. This, however, seems to be an important
factor for a society’s ability to innovate.
Therefore, social and digital infrastructure go
hand in hand. This means not only fast internet
with blanket coverage. It means also, learning
and thinking in networked connections must be
activated as well – via education, training and
qualification. For innovation and labour market
policy, this means both investing in innovations
and promoting the ability to make use of them
actively in the society (human capital). However,
it also includes analysing and structuring the
consequences of innovations in advance and
with the involvement of potential users (struc-
tural capital). In this way, employees become
innovation drivers and not the driven. The idea
here is to enable innovation through participa-
tion and thereby rely on open and social innova-
tions (relationship capital), in particular in the
care and health area. The strong connection
between a solid social infrastructure and the in-
novation capacity of a society is shown by the
Innovation Capability Indicator (IIT, 2018). Here,
once again, we can see the strong position of
the social-democratic welfare states (Sweden,
Finland) followed by conservative welfare states
like Austria and Germany.
Table 1.
Modernisation and social inequality: comparison of interactions
Modernisation
External
Internal
Social inequality
Low
Sweden
Medium
Germany
France
United kingdom
High
Italy
Spain
Estonia
Source: Buhr
et al
., 2016.