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 15: The Finnish model of the knowledge economy

Gerd Schienstock

Subjects: innovation and technology, innovation policy


Gerd Schienstock 15.1 INTRODUCTION Since Bell (1976) propagated the transformation of the industrial into a postindustrial society,1 many authors have varied the theme of a fundamental economic transformation in one way or another, characterizing the emerging new economy as an information economy, knowledge economy, science-based economy, network economy, or learning economy. But independent of how the emerging new economy is characterized and what indicators are used, Finland is almost always among the leading countries in the transformation process (Schienstock and Hämäläinen 2001). Increasingly the Nordic country is seen as a model of an information society, which differs significantly from other models such as Silicon Valley or Singapore (Castells and Himanen 2001).2 Finland is one of the few countries that have taken advantage in a straightforward way of the ‘window of opportunity’ opened up by the new knowledge paradigm associated with modern ICTs on the one hand and the network organization on the other. The country represents an exceptional case insofar as during the 1990s it went from being one of the least ICT-specialized industrialized countries to becoming the most specialized country, focusing particularly on telecommunications (Paija and Rouvinen, Chapter 3 in this volume). Finland’s economy is seen as a truly ‘new economy’, as hardly any other advanced economy has undergone such a massive transformation in such a short time-span (IMF 2001, p. 3). The fact that Finland has progressed very rapidly on its way towards the knowledge economy can be explained to a great extent...

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