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 7: From Path Dependency to Path Creation? Baden-Württemberg and the Future of the German Model

Gerd Schienstock

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

Extract

* Gerd Schienstock INTRODUCTION In this article I describe the problems occurring when a region that has been economically quite successful for a long period of time is confronted with recession and aims at developing a new growth path to overcome its economic difficulties. At the beginning of the 1990s, the German Land Baden-Württemberg with its traditional industries (automobile, mechanical engineering and electronics industries) was confronted with such a situation. Together with the deepest economic crisis Baden-Württemberg had been confronted with since the Second World War, structural problems in its economy became increasingly visible. In the current state of development it is difficult to judge whether the efforts to turn to a new growth path have been successful; recent developments seem to indicate, however, that such an undertaking is more difficult and takes more time than expected by the actors involved. Because of the great regional differences in the economic structure and related economic problems, I have selected a single Land as a research subject instead of Germany as a whole. I have chosen Baden-Württemberg because this Land more than any other represents the German production and innovation model which has been very successful in producing economic growth and social welfare during the postwar period up to the early 1990s. This model has been characterized as the ‘flexible specialization model’ (Sabel, 1989) or the ‘diversified quality production model’ (Streeck, 1991). Baden-Württemberg, with the Stuttgart region as its economic core, is presented...

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