Embracing the Knowledge Economy

Embracing the Knowledge Economy

The Dynamic Transformation of the Finnish Innovation System

New Horizons in the Economics of Innovation series

Edited by Gerd Schienstock

In an astonishingly short period of time, Finland has developed into one of the world’s leading knowledge societies whilst retaining a comprehensive welfare state. The book traces this rapid transformation from a resource-based to a knowledge-based society. The authors describe the country’s strengths and weaknesses in the new economy and demonstrate how Finland has been able to catch-up with the leading industrial countries by exploiting new techno-organizational opportunities. Experts from different fields provide rich empirical material on Finnish industries, firms, regions and institutions, and the role they have played in the transformation process. The book also details the business and economic restructuring which was required, and explores new trends in the country's science, technology and innovation policy.

Chapter 5: Knowledge services in the Finnish innovation system

Aija Leiponen

Subjects: innovation and technology, innovation policy


Aija Leiponen 5.1 INTRODUCTION: KNOWLEDGE-INTENSIVE BUSINESS SERVICES IN THE DEVELOPMENT AND CIRCULATION OF KNOWLEDGE IN THE INNOVATION SYSTEM This chapter examines the role of knowledge-intensive business services (KIBS) in the innovation system based on new data concerning Finnish business service firms. These services have become one of the key vectors of knowledge transfer in the system, and they are expected to perform as new engines of knowledge-based growth and innovation. Are these expectations realistic; can the KIBS sector deliver accordingly? This chapter explores how KIBS firms create new knowledge in the innovation system and how these firms influence their clients’ performance. Knowledge-intensive business services are a fascinating object of research also because their ‘products’ are information and competencies. These are the building blocks of the knowledge-based economy. Understanding how KIBS firms and industries operate will give us a ‘sneak preview’ into the strategies and issues emerging in the future as the knowledge intensity of the whole economy grows. Knowledge is a very special economic good because of its intangibility. We define knowledge here as consisting of codified information and tacit competencies. In contrast to information, the codified expression of competencies is frequently expensive if not altogether impossible. As a consequence, transferring knowledge from a business service provider to a client can take extended periods of time and require the client’s close co-operation and contribution, contrary to the situation in most tangible goods markets. The study of these kinds of knowledge transactions is only beginning but it is very promising, because...

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