Heterogeneity, Innovation and Entrepreneurship
Edited by Elias G. Carayannis, Aris Kaloudis and Åge Mariussen
Chapter 11: Specialization and Heterogeneity in Small National Economies: The Nordic Countries
Åge Mariussen INTRODUCTION Specialization is often seen as a cause of path dependency and other misfortunes of inﬂexibility. As global markets change, one might assume small countries with highly specialized national economies may get locked into declining sectors. To the Nordic countries, the oil crises in the 1970s were a crude wake-up call. Other problems were to come in the late 1980s and early 1990s. This chapter explains why and how, in diﬀerent ways, the Nordic countries are constructing unique business systems opening for wide networks of learning, thus enabling highly successful forms of global market adaptation. GARBAGE-CAN HETEROGENEITY Based on the the experiences of these crises, Kristensen and Levinsen (1983) discussed the ‘small country squeeze’. The characteristics of this squeeze can be described as follows. Small countries have open economies. Unlike the situation for large national economies such as the USA, which can live well for many decades with a negative trade balance, the foreign trade of small countries represents a large part of GDP. Their balance of trade has a direct and forceful impact on a number of core factors in the economy such as the stability of the national currency, rate of interest, the stock market, employment, the well-being of the citizens – in short, the wealth of the nation. What is more, because of its restricted size, a small country is not likely to have a very broad range of globally competitive clusters providing a secure overall net export balance of trade. Instead, small countries...
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