Social Innovations, Institutional Change and Economic Performance

Social Innovations, Institutional Change and Economic Performance

Making Sense of Structural Adjustment Processes in Industrial Sectors, Regions and Societies

Edited by Timo J. Hämäläinen and Risto Heiskala

This book examines the nature of social innovation processes which determine the economic and social performance of nations, regions, industrial sectors and organizations.

Chapter 4: Social Innovation or Hegemonic Change? Rapid Paradigm Change in Finland in the 1980s and 1990s

Risto Heiskala and Timo J. Hämäläinen

Subjects: business and management, organisational innovation, economics and finance, economics of innovation, institutional economics, innovation and technology, economics of innovation, organisational innovation


Risto Heiskala and Timo J. Hämäläinen INTRODUCTION We have two objectives in this chapter. First, we will analyze the rapid paradigm change and extensive structural transformation in Finland during the 1980s and particularly in the 1990s. The second objective relates to the social scientific and even political debate on the different ways of conceptualizing social change. It is sometimes argued that when changes in social structures are described as ‘social innovations’ the term hides from sight the hegemonic power struggles and conflicts between different interest groups associated with all social change processes. In this chapter, we will make an attempt to show that there is no reason to consider the two approaches as exclusive alternatives even though the controversy between them is understandable at the political level. The next two sections examine the structural and cultural transformation of Finland after the Second World War and particularly in the two last decades of the 20th century. The following two sections elaborate the analysis by using both social innovation and hegemonic struggle perspectives. The next section will combine these two, allegedly exclusive, perspectives and the final section will provide a brief conclusion.1 A SHORT HISTORY OF POSTWAR FINLAND: STRUCTURAL ADJUSTMENT AND INCREASING COMPETITIVENESS The postwar growth experience of Finland resembles the contemporary growth miracles of Japan and West Germany. After the lost war and heavy war reparations the Finnish economy industrialized very rapidly on the back of heavy investments in export-oriented basic industries such as...

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