Explaining Technical Change in a Small Country

Technical change is produced by the interaction of a largenumber of technical, economic, social and institutionalfactors. One of the starting points is the concept ofnational innovation systems. The aim of this book is to takeFinland as an example illustrating the challenges faced bysmall countries. The characteristics and performance of theFinnish national innovation system of the last couple ofdecades are analyzed. The Finnish experience is put in abroader context by comparing it with a few other countries. The development paths possible in the near future areassessed. According to the results, many problems remain despitefavourable developments in several technology indicators. The rigidities of the social institutions created during the1970s and 1980s seem to have become obstacles for economicand technological development. There are fairly largedifferences between the countries studied, and even betweenthe culturally and historically close Nordic countries. However,Finland and Sweden seem to share the same kind ofencompassing collective risk-sharing systems, which may havedetrimental effects on, for instance, incentives related toinnovativeness. Increasing globalisation requires furtherdevelopment of the national system of innovation. Technologypolicy must be seen as one part of more encompassing socialand economic policies, and the role of factors such aswell-functioning institutions, appropriate education andsound incentive systems is highly important. The papers of this book are written by experts of variousresearch disciplines. They reflect the respective views onthe issue how technical change in Finland can be explained. It is also discussed how Finland fares in comparison toDenmark, Sweden, Japan and the United States.