34. International Public Finance Conference

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DOI :10.26650/PB/SS10.2019.001.059   IUP :10.26650/PB/SS10.2019.001.059    Full Text (PDF)

The Course of Social Security Spending Within the Process of Society 5.0

Muhammet Şahin, Hamdi Furkan Günay

Technological developments have left indelible impacts on the economy all along the line. Every novel invention realized changes production processes rapidly, which concomitantly transforms social life. One of the most apparent examples of this is the First Industrial Revolution emerged in the 18th Century. Subsequent to this development which was considered as the beginning of production in the factory environment, the second industrial revolution based on automation (First half of 20th Century) and the third Industrial Revolution based on electronics (last quarter of the 20th century) were realized. Finally, the Fourth Industrial Revolution (Industry 4.0) process was initiated by Germany in 2011. In line with this process in which cyber-physical systems and robotic technologies are expected to prevail, Super-Smart Society (Society 5.0) model was developed by Japan in 2017. Both Industry 4.0 and Society 5.0 implementations are expected to have a significant impact on economic and social life and to change both labor and Welfare State practices fundamentally. It is also possible that these aforementioned developments may have an impact on social security system of the government. Likewise, the emergence of extensive unemployment condition due to robotic technologies and training for adaptation of available labor force to the new technologies may lead to redesign of the social security system. The aim of this study is to demonstrate the possible impacts of the Industry 4.0 and Society 5.0 processes on social security expenditures. The basic result obtained from the study; unemployment increase and training activities for the labor-force increases social security expenditures, but however digitalization process in Welfare State implementations may be expected to decrease social security expenditures in the long-run depending on efficiency and effectiveness increases in the government.


Keywords: Industry 4.0, Society 5.0, Welfare 4.0, Super Smart Society, Social Security Spending, Welfare State.
JEL Classification : H55 , O33 , I38

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