Embracing the Knowledge Economy
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Embracing the Knowledge Economy

The Dynamic Transformation of the Finnish Innovation System

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.
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Chapter 1: From path dependency to path creation: A new challenge to the systems of innovation approach

Gerd Schienstock


Gerd Schienstock 1.1 INTRODUCTION There is wide agreement that we are currently living through a period of fundamental and rapid economic transformation. Not only single elements of national economies are becoming the target of restructuring; instead the way the whole system is organized is changing. The ICT revolution is being given an important role in the transformation process; at the same time not only the established best practices of designing intra- and inter-organizational production processes, but also the existing institutional support structures, the functioning of political systems and even national cultures are fundamentally changing. Of course the fact of fundamental change also has major implications for research on techno-economic development and national systems of innovation. While up to now the systems approach concentrated mainly on the aspect of path dependency where the dominant feedback loops are self-reinforcing, in the current period research has to focus more on processes of unlocking and path creation (Garud and Karnoe 2000). The aim of this chapter is to contribute to such a re-conceptualization of the national systems of innovation framework. At the same time the chapter will raise some methodological problems and will point to some substantive aspects, which are dealt with in the following chapters of the book. Finland provides a good example of the successful creation of a new national development path, having been able to transform its resourcebased economy into a knowledge-based one (Castells and Himanen 2001). In the following section I will briefly discuss the traditional path dependency perspective and...

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