Small Country Innovation Systems

Small Country Innovation Systems

Globalization, Change and Policy in Asia and Europe

Edited by Charles Edquist and Leif Hommen

This major book presents case studies of ten small country national systems of innovation (NSIs) in Europe and Asia, namely, Denmark, Finland, Hong Kong, Ireland, the Netherlands, Norway, Singapore, South Korea, Sweden and Taiwan. These cases have been carefully selected as examples of success within the context of globalization and as ‘new economies’ where competition is increasingly based on innovation.

Chapter 10: Not Just Nokia: Finland

Ville Kaitila and Markku Kotilainen

Subjects: innovation and technology, innovation policy


Ville Kaitila and Markku Kotilainen INTRODUCTION Industrial development in Finland can be divided into three phases: (1) a factor-driven economy from the mid-1800s to the early 1900s; (2) an investment-driven economy from the end of the Second World War to the 1980s; and (3) an innovation-driven economy since the late 1980s. The innovation-driven economy developed as a result of increasing science and technology (S&T) content in production. Gradually, enhancing this development also became a political target. The birth of the Finnish S&T policy goes back to the 1960s and 1970s. This policy framework served as an important basis for the development of an explicit Finnish national system of innovation (NSI), which reached more or less its present form in the 1990s. Early in the development of the NSI the key actors were public. An important driving force behind the development of the NSI was the idea of strengthening economic competitiveness and diversifying the production structure. Since the early 1990s, private firms have become more important, especially in the information and communication technology (ICT) sector. Finland experienced a severe depression in the early 1990s, and the recovery from it was to a large extent due to fast growth in the ICT sector (see e.g. Paija, 2001, for an analysis of the evolution of the Finnish ICT cluster). Lately, innovative activity in Finland has been dominated by the electronics industry as reflected in the success of this sector, and particularly of Nokia. Application of ICT in other sectors is...

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