Earlier today I was having a conversation with European clients in the social security domain and we were discussing about the impact of government 2.0 in that domain. The usual examples came up, ranging from the role of communities in child welfare, to how to leverage LinkedIn to re-employ unemployed people. But none of those ideas – most of which are being piloted to different extents in different countries – really sounded transformative.
We then discussed about what are the toughest problems for social security going forward, and it was clear that one was the sustainability of public pension systems. With the economic downturn requiring massive investments to sustain employment, industry and society in general, the affordability of the pension systems – already seriously challenged by demographic changes in Europe – will be an issue going forward. While governments will keep using traditional levers, such as incentives to mixed public-private systems or tax increases, some of these may prove less effective as people’s trust in the financial services sector (including pension funds) is shaken by last year’s events and disappointing performances, and as raising taxes may prove difficult where economic recovery is particularly slow or anemic.
Could web 2.0 help address these issues?
On a more tactical level, social networks could be used to raise workers’ awareness about the need to worry about how to build their pension by actively saving money or seeking for complementary coverage that may complement declining public pensions. The typical demographics of Facebook or other social network are the right target to convey this message and social security agencies could partner with existing or emerging communities to provide advice, simulation packages, discussion forums, best practices and so forth.
On a more strategic level, the question is: could technologies like social software create new ways for people to complement, strengthen or possibly replace public pensions or pension funds? This may sound like a crazy idea, but if people lend money to each other on www.zopa.com, why shouldn’t they save a little bit of money here and there, and put them into a community fund? There are multiple ways they could do this: by monthly installments on their salaries, by lumpsum payments (of different amounts), by adding a very small percentage to their online purchases (one they could decide themselves), and so forth. Money could be administered by the community in various ways, mostly in low-risk, community-oriented services (such as microlending like zopa.com) or in conjunction with professional fund managers and – indeed –social security organizations (at least in an initial phase before reaching critical mass and reliable self-governance mechanisms).
While this requires regulations, oversight, trust mechanisms, I wonder whether any social security organization is reflecting about community models like these and feel ready to try them out in a few years’ time.