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 11: An NSI in Transition? Denmark

Jesper Lindgaard Christensen, Birgitte Gregersen, Björn Johnson and Mark Tomlinson

Subjects: innovation and technology, innovation policy


Jesper Lindgaard Christensen, Birgitte Gregersen, Björn Johnson, Bengt-Åke Lundvall and Mark Tomlinson 1 INTRODUCTION How has a small high-income country with high wages, high taxes, a large public sector, an export specialization in low-tech products (with a few exceptions) and a relatively low proportion of people with a higher education in science and technology been able to adjust to changing international market pressures and stay competitive and wealthy for decades? In particular, two interdependent explanatory factors have been put forward in recent studies of the Danish national system of innovation (NSI) (Lundvall, 2002). The first explanatory factor is the Danish welfare state model. Since the 1960s, Denmark has emphasized social cohesion and a relatively equal income distribution based on comprehensive redistribution mechanisms. Since the 1930s the country has had strong trade unions and a strong political presence of the Social Democratic Party even in periods when that Party did not form the government. A central institution in the formulation and implementation of economic policies has been the corporatist system of interactions between the state, the trade unions and the employers. This has created a labour market with a high degree of ‘flexicurity’, combining high flexibility for employers to hire and fire with relatively high degree of income security for the employees (Madsen, 2006). A crucial related aspect of the social cohesion model is the high labour market participation rate for women in combination with an extended public service scheme for child and elder care. The second and related...

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