The social investment turn

By the end of the 1990s, political disenchantment with neoliberal policy measures began to generate electoral successes for the centre-left. Newly elected European social democrats such as Tony Blair, Gerhard Schroder, Wim Kok, and Poul Nyrup Rasmussen, strongly believed that European welfare states had to be transformed from passive benefits systems into activating, capacity building, social investment states. This policy platform was inspired intellectually by Anthony Giddens's 1998 book The Third Way: The Renewal of Social Democracy. By the late 1990s, Third Way ideas made their way to the European Commission (1999). But intellectually, and very surprisingly, it was the OECD who made the first about-face turn-around, away from the neoliberal advocacy that had characterized their Jobs Strategy publications of the 1980s and 1990s, to spearhead the social investment perspective at their 1996 high-level conference, 'Beyond 2000: The New Social Policy Agenda' (OECD, 1997b). Recent OECD studies such as Starting Strong (2006b), Babies andBosses (2007a), Understanding the Social Outcomes of Learning (2007b), Growing Unequal (2008), and Doing Better for Families (2011a) are perhaps even more exemplary of the OECD's fully-fledged endorsement of the 'social investment paradigm' (Jenson and Saint Martin, 2003; Jenson, 2006, 2009, 2010, 2012; Morel, Palier, and Palme, 2012).

The EU, meanwhile, developed its own version of the social investment paradigm, beginning under the Dutch EU presidency in the first half of 1997 (Hemerijck, 1997), when the Dutch Ministry of Social Affairs and Employment staged a high-level conference in cooperation with the European Commission, entitled 'Social Policy as Productive Factor'. The intention of the conference, chaired by Jacques Delors, was to correct the lopsided view that comprehensive social policy provisions, however morally commendable, only engender negative economic effects. The central tenet of the EU's turn to social investment is that social policy can potentially be a productive factor. Whereas neoliberal doctrines posited a trade-off between these goals, the social investment paradigm sees improved social equity as going hand in hand with more economic efficiency. Key policy provisions can be viewed as investments, potentially enhancing both social protection and productive potential.

In 2000, the Portuguese presidency of the EU further raised the social and economic policy ambitions of the EU, by putting forward an integrated political agenda of economic, employment, and social objectives, committing the Union to becoming the 'most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion'. The so-called Lisbon Strategy represented an attempt to relaunch the idea of the positive complementarities between equity and efficiency in the knowledge-based economy by way of 'investing in people and developing an active and dynamic welfare state' (European Council, 2000a). In addition to the objective of raising employment rates throughout Europe, the Lisbon Agenda placed human capital, research, innovation, and development at the centre of European social and economic policy. This broadened the notion of social policy as a productive factor beyond its traditional emphasis on social protection, to include social promotion and improvement of the quality of training and education. The Lisbon Strategy also prefigured a refocusing of equal opportunity policies with an eye to raising the employment rates of women and elderly workers (Four- age, 2003).

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