"Social Welfare Is Slow to Respond; Proactive Redesign Is Needed"

Provided by Samil PricewaterhouseCoopers

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By 2030, it is projected that 20% of the global population will be aged 60 or older, prompting analysis that the social welfare system needs to be reorganized. Since social welfare already accounts for 21.2% of the gross domestic product (GDP) across OECD member countries, there is a growing argument for pursuing a more integrated and proactive approach.

On April 20, Samil PwC announced the publication of its report, "Redesigning Social Welfare: Focusing on the 4P Strategy." Based on PwC Global’s public sector consulting experience and case studies from major countries, this report presents implementation strategies for transforming social welfare from a reactive model to a proactive, outcome-centered system.

The report diagnoses that the current social welfare framework largely intervenes only after problems have occurred. While there have been partial improvements such as administrative efficiency measures and digital transformation, the report finds that these alone are insufficient to provide comprehensive support throughout residents’ lives, and that outcomes relative to resources invested remain limited.

Furthermore, the report emphasizes the need to go beyond simply supplementing existing systems, calling for a fundamental “redesign” of the entire welfare system, particularly with local governments as the main implementing bodies.

As the core direction for this redesign, the report proposes the "4P Strategy," which consists of: ▲Prevention ▲Personalization ▲Partnerships ▲Integrated Support Systems. Prevention focuses on identifying risk signals and needs before issues become serious and responding in advance. This approach aims to reduce the social and financial burdens that accumulate after crises occur, while increasing the long-term effectiveness of policies.

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Personalization refers to an approach that flexibly adjusts the content and method of support based on individuals’ circumstances and needs. According to data released by the OECD in 2024, in the United Kingdom, a pilot integrated service project for young people from foster care backgrounds led to a 30% increase in sustained employment rates, while in Finland, the introduction of customized services for people with disabilities improved independent living outcomes by 40%.

Partnerships involve shifting away from a siloed response by sectors such as welfare, health, and employment, towards a structure where local governments, the private sector, and the community work together. This is intended to strengthen the capacity to respond to residents’ complex needs.

The integrated support system focuses on connecting multiple policies and services in a seamless flow, minimizing gaps between systems and missing support opportunities.

The report highlights the potential of an AI-based integrated support system for implementing the 4P strategy in the field. In this model, artificial intelligence recommends individualized support pathways and adjusts assistance as circumstances change, while final decisions and face-to-face support are handled by on-site staff. The analysis suggests that this could reduce fragmentation and inefficiency in the welfare delivery process. The full contents of the report are available on the Samil PwC website.

Byungil Kim, leader of the local government, large enterprise, and university cooperation platform (partner) at Samil PwC, stated, “The key is not simply to expand the system, but to ensure that support-previously requiring separate applications at various points for welfare, care, employment, and housing-can be connected at once at the local level. If local governments actively leverage AI and redesign service delivery itself with the 4P strategy, social welfare can shift from a simple cost management tool to a financially sustainable, people-centered system.”

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