Knowledge Economy and New Social Risks

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1 Pasi Pyöriä Knowledge Economy and New Social Risks Current research project funded by the Academy of Finland: Flexible Work Arrangements in Knowledge-Intensive Firms Kalevi Sorsa Foundation

2 Tampere a post-industrial city? Tampere used to be a typical industrial city today there is only one traditional factory left in the city centre Tampere has a dual focus: ICTs and R&D oriented technology industries The presence of two universities has been vital for regional development International enterprises in the Tampere region: Nokia, Metso, UPM, Sandvik Mining and Construction, Tieto, Fujitsu

city centre Tampere has a dual focus: ICTs and R&D oriented technology industries The presence of

3 Understanding Work in the Age of Information: The Finnish Model of an Information Society. (VDM Verlag 2007) On-line version available at:

4 Table of Contents 1. Introduction 2. The Finnish Information Society 3. The Rise of Knowledge Work 4. Knowledge Work Teams 5. Distributed Work Arrangements 6. The Limits of Teams and Distributed Groups 7. Lessons from Finland Why is it that a small state such as Finland has evolved into a competitive knowledge economy?

Distributed Work Arrangements 6. The Limits of Teams and Distributed Groups 7.

5 Creating, using and communicating knowledge Fritz Machlup: The Production and Distribution of Knowledge in the United States (1962) Peter Drucker: The Age of Discontinuity (1969) Daniel Bell: The Coming of Post- Industrial Society (1973) Marc Porat and Michael Rubin: The Information Economy (1977) The economist Fritz Machlup

Discontinuity (1969) Daniel Bell: The Coming of Post- Industrial Society (1973)

7 Knowledge work requires Extensive formal education and continuous on-the-job learning Transferable skills Working with abstract knowledge and symbols (e.g., design and planning of production processes) Teamwork and collaborative problem-solving Management skills

8 Information occupations in Finland in (%) Source: OECD (1970), Statistics Finland ( ).

50 45 40 35 30 25 20 15 10 5 0 1970 1980 1985

9 Have we seen the limits of growth in knowledge work? 1. In Finland the number of jobs that involve creating new knowledge has doubled between 1980 (10 %) and 2004 (20 %) these include experts in R&D, engineering, health care, education, marketing, financial services etc. 2. Due to increasing qualification demands the labour market has become more selective than ever before

(10 %) and 2004 (20 %) these include experts in R&D, engineering, health care, education,

10 In no other European democracy has the progression from an essentially agrarian society to a service economy been compressed into a mere four decades. Finland, it seems, has become a typical postindustrial state in the lifetime of many Winter War veterans. (David Arter 1989) Arter, David (1989) Finland: A Typical Post-industrial State? In Engman, Max & Kirby, David Eds. (1989) Finland: People, Nation, State. Pp London, Hurst & Company.

Finland, it seems, has become a typical postindustrial state in the lifetime of many Winter War veterans.

11 The constituents of the Finnish information society I SYSTEMATIC HIGH-TECH FOCUS Heavy investment in research and development R&D expenditure rose from a low 1.8 % in 1989 to 3.2 % in 1999 Today Finland spends over 3.5 % of its GDP in R&D

development R&D expenditure rose from a low 1.

12 The constituents of the Finnish information society II BROAD CO-OPERATION AMONG 1. business enterprises 2. publicly funded research institutes 3. policy makers

13 Nokia E7 Communicator collaboration with local research institutions

14 The constituents of the Finnish information society III WELFARE STATE MECHANISMS In the 1960s, following other Nordic countries, Finland began its project of building a democratic welfare state Although the expansion of welfare state mechanisms ended in the 1990s, universalism and democracy still remain the guiding socio-political principles

democratic welfare state Although the expansion of welfare state mechanisms ended in

15 Key challenges for the future 1. Unemployment 2. Labour shortage 3. Labour market polarization 4. Quality of working life 5. Income differences and debt 6. Demographic change 7. Flawed immigration policy 8. Quality of (basic level) education 9. Intensifying global competition 10. Loss of national togetherness

Income differences and debt 6. Demographic change 7.

16 The Information Society and the Welfare State According to Castells, Finland has managed to combine competitive economy with welfare state mechanism Castell also argues that Finland has been a pioneer in ICTs and this explains Finland s economic success Castells idea is simple and appealing, but it is also false, since all successful first-mover advantages can easily deteriorate into first-mover disadvantages. (Dan Steinbock). Castells, Manuel & Himanen, Pekka (2002) The Information Society and the Welfare State. The Finnish Model. Oxford University Press.

and appealing, but it is also false, since all successful first-mover advantages can easily deteriorate into first-mover disadvantages.

17 Thank You! Questions, comments?

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