ABSTRACT
A central characteristic of modern society is the crucial importance of innovations. In the current knowledge society, welfare and economic prosperity are based to a lesser extent on territorial barriers erected along national borders for the free trafficking of people, goods, capital and services and to a larger extent on temporary advantages gained through innovation. This poses the question if current forms of welfare-which are closely connected to national governance structures-can be maintained.1 On the one hand, this could be expected if social expenditures were to slow down a country’s innovation dynamics. On the other hand, if social security facilitates the acceptance of innovations, then even increasing social expenditures should be expected since the uncertainties associated with innovations would thus be compensated. The relationship between innovations and social security is crucial especially for Europe, as most European countries are characterized by high social expenditures.2 If social security systems should prove to be an impediment to innovation, this, in the long term, could lead to an erosion of the European social model. Otherwise, the European welfare states could even envisage competitive and innovative advantages due to their specific production and innovation capabilities (see Heidenreich 1999; Hall and Soskice 2001). Thus, this chapter examines the relationship between innovations and social security on the basis of internationally comparable data.
