Academic journal article Trames

Reconsidering the Finnish Model-Information Society Policy and Modes of Governance

Academic journal article Trames

Reconsidering the Finnish Model-Information Society Policy and Modes of Governance

Article excerpt

1. Introduction

Finland has traditionally been considered as belonging to Nordic welfare states which have emphasized broad participation in working life, relatively low unemployment and extensive and redistributive welfare policy. The building of the welfare state in Finland can be seen as a broad project to modernize the society which has aimed at increasing societal and regional equality, balancing income differences and modernising industrial and economic structures (Cabinet programmes 1976-1983). Politically, the building of the welfare state centred around a center-left coalition with interest groups and in particular farmers having a strong position. Although the labour union has never had as powerful a position as in other Nordic countries, the building of the welfare state has favoured corporatist governance structures aiming at balancing conflicts between capital and labour and increasing consensual politics over time.

Yet, during the late 1980s and 1990s Finland experienced major changes. The country was still building up the welfare regime when it was hit by a banking crisis and a severe economic recession. While at the end of the 1980s the Finnish GDP had grown 5 per cent annually, in 1991 and 1992 the growth turned into a decrease of 7 and 4 per cent respectively. (1) The rise of unemployment was remarkably fast: in 1992 unemployment rate in Finland was one of the smallest in Europe, but in 1993 it was 16.4 per cent, the highest in Europe after Spain (OECD 2005). Such transition from a country of almost full employment into a country with high unemployment is unique in the OECD countries after the Second World War (Kantola 2002). The recession added momentum to political changes, and in consequence, the closed planning economy was opened, the country joined European integration and market-oriented policies started to gain ground.

By the middle of the 1990s, however, the Finnish economy was already rapidly recovering and in particular the development of the Finnish information and communication technology (ICT) cluster started to receive international attention. The Finnish economy was suddenly taken as an example of how the production and use of ICTs can change the economic structure, increase productivity and promote economic wellbeing. International competitiveness rankings started to rank Finland in the top positions and the ICT-driven economic recovery was termed as the Finnish 'miracle' (e.g. Benner 2003). In consequence, the Finnish experience has been considered as a paradigmatic example of societal transformation in the information age. Several observers have started to point to a 'Finnish model' which has been considered as exceptional in that it is able to combine a highly competitive knowledge-intensive economy with an inclusive welfare model (Castells and Himanen 2002, Himanen and Castells 2004:43-51, see also Schienstock 2004, Saari 2006). In their influential account Manuel Castells and Pekka Himanen (2002), for instance, see that there is a virtuous circle between the informational economy and the welfare state: economic growth provides the possibilities for financing the welfare services and the welfare state produces educated people, skilled workforce and social protection which are the preconditions for further innovations and growth of the informational economy. In this way, Finland has been seen as an example of successful adaptation to globalisation in that it has been able to move into knowledge-intensive production "while not deviating from the established welfare and employment policies" (Benner 2003:147).

This picture, however, tends to neglect several important aspects of the Finnish experience. In particular, it does not take into account the weakening of the social dimension and increasing social inequalities (c.f. Heiskala 2006). It would thus be relevant to ask whether the building of an information society in which competitiveness of the economy, the promotion of new technologies--in particular new information and communication technologies--and enhancement of knowledge-intensive production structures are increasingly central, has actually surpassed the welfare state project (see also Pelkonen 2008). …

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