Digital Transformation and Public Services

Societal Impacts in Sweden and Beyond

Anthony Larsson, Robin Teigland, Anthony Larsson, Robin Teigland

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000690989
• Edition: 1
• Topic: Économie
• Subtopic: Finances publiques

Through a series of studies, the overarching aim of this book is to investigate if and how the digitalization/digital transformation process affects various welfare services provided by the public sector, and the ensuing implications thereof. Ultimately, this book seeks to understand if it is conceivable for digital advancement to result in the creation of private/non-governmental alternatives to welfare services, possibly in a manner that transcends national boundaries. This study also investigates the possible ramifications of technological development for the public sector and the Western welfare society at large.

This book takes its point of departure from the 2016 Organization for Economic Co-operation and Development (OECD) report that targets specific public service areas in which government needs to adopt new strategies not to fall behind. Specifically, this report emphasizes the focus on digitalization of health care/social care, education, and protection services, including the use of assistive technologies referred to as "digital welfare." Hence, this book explores the factors potentially leading to whether state actors could be overrun by other non-governmental actors, disrupting the current status quo of welfare services.

The book seeks to provide an innovative, enriching, and controversial take on society at large and how various aspects of the public sector can be, and are, affected by the ongoing digitalization process in a way that is not covered by extant literature on the market. This book takes its point of departure in Sweden given the fact that Sweden is one of the most digitalized countries in Europe, according to the Digital Economy and Society Index (DESI), making it a pertinent research case. However, as digitalization transcends national borders, large parts of the subject matter take on an international angle. This includes cases from several other countries around Europe as well as the United States.

1 An introduction to digital welfare

A way forward?

Anthony Larsson and Robin Teigland

1 Introduction

Increased “availability” and “individualization” are two of the most common demands from consumers in this day and age. This is a development that has gained a substantial foothold on the contemporary consumer market, whether the services lie in finance, insurance, retail, and/or transportation. The Internet, smartphones, and other technologies sprung from the digital age have helped people gain better insight into and awareness of what they expect from a service provider (Hardey, Loader and Keeble, 2009). To this extent, the welfare sector, just like other industries, also benefits from new technologies and digital innovations, as it seeks to drastically improve our everyday lives and help us create more sustainable societies.

It should at this point be noted that the welfare state as, we know it, has existed for approximately 100–150 years. While one may contend that the first welfare state was presented by the Islamic Caliphate under Umar (584–644), it did not exist in its modern concept until the late 19th-century Imperial Germany (1871–1918) under Chancellor Otto von Bismarck (1815–1898), when he established the social-welfare legislation that extended the privileges of some of the noble social classes to common Germans (Crone, 2005; Von Kersbergen and Vis, 2014). Still, the welfare sector is nowadays commonplace in most Western societies (albeit to varying degrees). However, digital solutions are often arduous to scale for the welfare sector. This is because the manner in which the welfare state is organized leads to various incentive structures that may hinder digital development. Traditionally, the incentive structure has been such that “the lower the benefit levels are in the compulsory systems, the stronger the incentives for citizens to add voluntary (market) solutions, in the form of private saving and private (individual or collective) insurance arrangements” (Lindbeck, 1996, p. 1). To this extent, the rapid development of digital technology poses a challenge to several of the extant structures, providing citizens with new options in areas where they see a need for something that is currently not provided for by the state. In return, new actors entering the welfare sector have prompted a counter-response from the state actors, in some cases coaxing these actors to expedite their digital evolvement in order to safeguard their market share against the new actors. This book will endeavor to explore the development in different welfare areas as outlined later in this introductory chapter.

Digital technology consists of many different concepts and components. As previously mentioned, the Internet has in many ways provided the backbone to much of this development, providing people with information access and flexibility in ways that were not possible in the past (Kienhues and Bromme, 2011). The development of smartphones has done much to forward digital advancement, providing people with Internet access virtually anywhere at any time (Amstutz, 2018). There are, of course, some other important developments that have done much to advance the digital age. Artificial intelligence (AI) (sometimes known as “machine intelligence”) is a popular concept that has been defined in many different ways. In its broadest and simplest definition, it pertains to the description of a function wherein machines mimic human “cognitive” functions, such as “learning” and “problem-solving” (Russell and Norvig, 2009; Kaplan and Haenlein, 2019). The term “AI” is popularly attributed to computer scientist John McCarthy (1927–2011) in 1955 (McCarthy et al., 2006). McCarthy defined AI as “the science and engineering of making intelligent machines, especially intelligent computer programs” (McCarthy, 2007, para.2).

A closely associated concept is predictive analytics, which pertains to various statistical techniques, including data mining, predictive modeling, and machine learning, that analyze current and historical facts in order to make predictions about future events (Siegel, 2013; Kelleher, Namee and D’Arcy, 2015). Robotics is another broad concept that concerns the design, construction, operation, and use of robots. This also includes the computer systems needed for their control, sensory feedback, and information processing (Newton, 2018). While robots can take on any form or appearance, some are designed to resemble certain aspects of humans in order to help humans accept the robot’s presence in carrying out certain replicative behaviors that are otherwise typically performed by people, such as attempting to replicate walking, lifting, speech, and cognition (Liu, Sheng and He, 2019). There is currently much debate regarding to what degree designers should aspire to design physical human characteristics on robots. The “uncanny valley” is a phenomenon in which humans may experience a feeling of discomfort when interacting with a robot that looks nearly, but not entirely, identical to a human being, while being more accepting of a robot designed with less humanoid features (Van Wynsberghe, 2015).

Terms like “digitization,” “digitalization,” and “digital transformation” are ever so often confused, as they are often used interchangeably in various settings. Nevertheless, there are distinct differences among the terms, which are important to bear in mind before going forward. The first term, “digitization,” entails the conversion of analog material (such as images, video, and/or text etc.) into a digital format (Larsson and Viitaoja, 2017; Feldman, 1997; Brynjolfsson and McAfee, 2014). The second term, “digitalization,” refers to a process wherein the use of digital/computer technology (also mobile applications) is adopted, or, alternatively, increased by an actor (Wachal, 1971; Castells, 2010). More often than not, the digital technology is implemented with the intent of establishing a communication infrastructure that connects various activities of the actor’s various processes (Van Dijk, 2012; Larsson and Viitaoja, 2017). “Digital transformation” is a considerably broader term that signifies customer-driven strategic business transformation requiring far-reaching and cross-cutting organizational change in addition to the implementation of digital technologies (Bloomberg, 2018; Cochoy et al., 2017). Due to its scope, digital transformation is in reality not a matter of implementing one project, but rather a whole series of different projects, effectively necessitating the organization to deal better with change overall. In this way, digital transformation in and by itself essentially makes organizational change a core competency inasmuch that the venture seeks to become customer driven end to end (Bloomberg, 2018).

For this reason, digitalization and digital transformation are the two most useful/significant terms when explaining the changes and impact that digital technology has had on society at large. That is to say, intelligent algorithms make our day-to-day tasks easier, and it is in many cases nearly impossible to imagine how we could manage without them. The use of AI and robotics continues to gain momentum at a rapid pace. To this end, the idea of digitalizing welfare and the public sector has been seen as a way of providing a more efficient and cost-effective solution in order to cater to the ever-growing demands of the population. Societal challenges, such as a growing and ageing population, along with population increase of chronic diseases and overall lingering financial constraints, have placed the public sector under pressure to find new ways of providing public services while keeping the costs down. The contention is that by using technology in welfare services, it can help secure the continued economic stability of the welfare state. Moreover, another possibility enabled by digital welfare is for the public sector to become more interconnected. Sharing information across the public sector is essential in order to shorten lead times, secure transparency, and ensure that the correct care is given to the right citizen.

To this extent, a 2016 Organization for Economic Co-operation and Development (OECD) report targets specific public-sector areas where governments need to adopt new strategies in order to ensure that they keep an even pace with societal development (OECD, 2016). Specifically, this report emphasizes the focus on digitalization of health care and social care,¹ education, and protection services. The “smarter” use of well-proven assistive technologies in this context was referred to as “digital welfare.” Hence, this book has sought to explore topics within these spaces, as these are areas in which the state actors potentially risk being overrun by other non-governmental actors, be they local or global. That is to say, the entry of new actors in these areas has the potential to cause a disruption of the current status quo of welfare services provided by national governments for their citizens, and it is likely this disruption that is escalated through the advancement of “digital welfare.”

Ultimately, the discussion of technological advancements raises questions regarding the future role of the nation state in a fully digitalized world (Dasgupta, 2018; Schmidt and Cohen, 2013). Traditionally, the nation state has always been seen as the classic provider of security and basic well-being in exchange for citizens’ loyalty. However, what will happen when new types of loyalties and associations begin to challenge the state’s traditional role, that is, loyalties of kindred identities based on shared commercial, political, and/or other interests, rather than religious or ethnic identities? Such a development is not unproblematic for the current nation state. Many citizens, particularly in the West, work for or hold stock in commercial organizations that pay little to no regard to national tax and/or regulatory agencies. To this end, nation states may more often than not adhere to models of welfare provision that increasingly disappoint their citizens and are, moreover, often unaffordable. Thus, the developed Western countries’ high-cost, high-tax, high-benefits governance model is coming under an increasingly looming threat of disruption caused by global digitalization. To that end, this book will seek to explore the ramifications of such a societal development.

Moreover, this book seeks to provide an innovative, enriching, and controversial take on society at large and how various aspects of the public sector can be (and are) affected by the ongoing digitalization trend in a way that is not covered by extant literature on the market. While this book covers the welfare state in a broader, Western perspective, many cases covered in this book draw upon Swedish conditions. This is due to the fact that according to the Digital Economy and Society Index (DESI), Sweden (along with Denmark, Finland, and the Netherlands) is one of the most digitalized countries in Europe (European Commission, 2019). This means that the Swedish cases presented tend to reflect a development in a particular area that is, by international standards, often more advanced, as opposed to that seen in many other countries, making the Swedish cases pertinent to study, as they may bear relevance to the future development in other countries in this area. Still, much of the digitalization and digital transformation transcends national borders, and thus much of the subject matter takes on an international character and also includes cases from other countries around Europe and the United States, as it still houses some of the world’s most innovative research institutions (Ewalt, 2016).

Following the aforementioned discussion, this book seeks to explore the following areas of the public sectors (and the society in which they exist) and how they are affected by digital welfare:

Health care and social care

• Telemedicine and its impact
• Blockchain in health care
• Digital developments in health care
• Social care and digitally connected devices

Education

• EdTech
• Digital transformation of public education

Citizen protection

• Physical protection, both individual and societal
• Digital protection, data collection, and digital identity

Future of the welfare state

• Potential implications
• The future of cash in a digital welfare state
• New technological institutions
• The future consumption of welfare
• The changing democracy

The studies throughout the included chapters are methodologically and thematically multidisciplinary in nature, with some presenting empirical material and others more theoretical, while others are based on various forms of literature reviews or depart from the authors’ personal, “best practice” experiences, and so forth. The book represents a collaborative effort between expert authors with representation from some of the most prominent research institutions and organizations in Europe and the United States, all contributing to a better understanding of the topic at hand. The authors have been instructed to look at the situation of their topic as how it has been, how it is now, and how it might be in the future. To this end, the chapters will base their assumptions in referenced facts, but they may also transcend the co...