Welfare, human capabilities and innovation

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1 STI indicator seminar, Helsinki Welfare, human capabilities and innovation Reijo Miettinen, University of Helsinki

2 Four challenges 1) The extension of the concept of innovation to social and broad-based innovation (including public services): can indicators based on a firmcentered can the firm-centered model developed by the evolutionary economics of innovation be a sufficient model any more? Or do we need domain specific knowledge/expertise of different services/activities in order to enhance innovation? 2) There is an urgent need to understand interactions between, innovation-, social- and welfare-, as well as educational policies. (a) Gunnar Myrdal/Pekka Kuusi: a virtuous cycle between equality, democracy and economic activity as a foundation of the Nordic welfare model (b) Both economic and social political debates regard investment in human capital, skills and capabilities as a central starting point for policy making. However, they have little to say of the nature of development of self or creative capabilities or the quality of capability cultivating services such as education.

3 Challenges. 3) Indicators alone does not allow the development of the quality of services: the processes (practices and institutions) behind them need to be understood to take developmental measures (Why Finnish students are good in PISA tests?) 4) Indicators needs to be combined with national statistics, quantitative studies of specific issues, historical understanding as well as theoretical substantial knowledge of the social processes to which the indicators refer to.

4 Distribution of expertise in natural scientific knowledge of the 15-year old students in Finland and in OECD average, PISA 2006 Level of natural scientific expertise Finland OECD Average 6 and 5 Excellent 20,9 9,0 4 Good 32,2 20,3 3 Satifactory 29,1 27,4 2 Passable 13,6 24,0 1 Weak or under 4,1 19,3 Total 100,0 100,0

5 What is behind the figures? The Finnish students have been on the top in all four PISA studies, the share of the low achievers is exceptionally low (4% vs. 19% the OECD average), the differences between the schools are lowest among the OECD countries, the public spending on education lowest among the Nordic countries and about the average among the OECD countries? Why?

6 Institutional explanations for the success of of the Finnish students in PISA tests 1) The popularity and esteem enjoyed by the teaching profession as well as the university-level education of teachers 2) The decentralized, trust-based governance of the public comprehensive school system no educational market, no national tests before student matriculation, no ranking lists of schools, no inspection systems 3) Special education system based on the early recognition of learning difficulties and the immediate provision of support mostly in the form of part time special education in small groups 30% of students have received some of it 4) Contribution of other services such as maternity and family clinics, day care and the public library system

7 The test results are not allowed to use for the comparison of schools In a recent study (Rinne & al. 2012) 93% of both Finnish rectors and teachers of comprehensive schools resisted the publication of rankings lists of schools because it would accelerate the division of schools into goods and bads. Almost as many agreed that they would increase teaching for testing and would be detrimental for the quality and development of teaching.

8 Uses and interpretations of PISA results Istance (2003, 88): Level 3 is taken as representing a critical baseline, albeit a high minimum, given the demands of Lifelong Learning and the knowledgebased society impose. Esping-Andersen (2009, 116): Falling below the PISA minimum means that respondents have difficulty in understanding even basic information ; this is accordingly a measure of cognitive dysfunction.

9 Good/strategic literacy as a foundation of absorptive capacity of firms and other organizations PISA has been designed to measure students capacity to utilize knowledge in real-life situations Absorptive capacity (Cohen & Levinthal 1990): the capacity of firms and other organizations to follow and utilize the development of the fields of research and expertise relevant for their products or services. Strategic literacy capacity to follow, evaluate, indicate the significance, apply and interpret to others the new knowledge in a field constitutes the individual foundation for AC (highest levels in PISA reading tests as an indicator)

10 The OECD: Reading and writing skills in PISA studies and participation to knowledge society (PISA 2009) Levels (4-6) able to follow the development of a field of knowledge: Potential contributors to innovation and development Level 3 basic level of the knowledge society citizenship. Level (1 or under) functionally illiterate, a group that is in risk of exclusion from the knowledge-based economy and civil society % of Finland Norway UK Greece Bulgaria OECD approx or under

11 The capability cultivating (welfare) services Child and maternity (family) clinics, daycare Basic education (with complementary services, student care, special education, student health care) Cultural services, music, art and dance school systems, Public library system Sport, youth and cultural associations, youth work, child and youth mental health services Secondary and vocational education, apprenticeship systems, Career choice and employment agencies Tertiary education

12 Contribution of universal education and other capability cultivating services to innovativeness and competitiveness 1) Provides high-quality workforce for labour market and foundation for the absorptive capacity of firms and other organizations 2) A key foundation of trust and social capital that facilitates economic transactions and enhance collaboration across boundaries and between different professional and social groups 3) A high quality secondary and tertiary education makes possible adaptation to unexpected structural changes in the economy (the emergence of the Finnish ICT sector as an example)

13 Conditions of the cognitive development in early childhood (Esping-Andersen & Heckman) The significance of the level of education for employability has radically increased in last decades. A recent follow-up study (Sipilä et al. 2011) shows that in Finland men born in the 1970s who only completed comprehensive school had six times greater risk of staying unemployed compared with those who had matriculated. The foundations of cognitive development and motives are formed in early childhood. The interventions for securing the development of capabilities and avoid exclusion should be focused on living conditions of early childhood. Later interventions are ineffective (Heckman & Masterov 2007). The income and health differences have increased. New poverty focuses on children families, especially one-mother families. The number of children who lived in poor families in Finland increased from 30,000 in 1990 to 52,000 in 1995 and to 152,000 in 2007 (Vaarama et al. 2010). Weakens the possibility of the enabling services to achieve their goals.

14 Childhood-centered social-, capability- (and innovation) policy The centrality of family policy, early childhood and family related services and daycare in assuring the good start and the development of capabilities and creativity as well as the risk of exclusion Esping-Andersen (2009): Daycare as a strategic service: (1) By advancing employment it prevents poverty (2) Mitigates the differences in the family conditions and resources (3) Develops sociality, self-reliance and creative capabilities. The developmental psychology suggests that the foundations of imagination and creativity (generation of imagined alternative worlds) develops in play activity. Investment in the development of play pedagogy in kindergarten and first classes of primary school is instrumental for the development of creative capabilities (that is innovativeness).

15 References Cohen, W. and, D. Levinthal (1990). Absorptive capacity: A new perpective on learning and innovation, Adminstrative Science Quarterly 35, Esping-Andersen, G. (2009). The incomplete revolution. Adapting to woman s new roles. Cambridge: Polity. Heckman, J.J. & Masterov, D.V. (2007), The productivity argument for investing in young children, Review of Agricultural Economics 29(3), Istance, D. (2003). Schooling and lifelong learning: insights from OECD analyses. European Journal of Education 38(1), Miettinen, R. (2013), Innovation, human capabilities and democracy. Towards an enabling welfare state. Oxford: Oxford University Press. Rinne, R., Simola, H., Mäkinen-Streng, M., Silmäri-Salo, S. and Varjo, J. (2011), Arvioinnin arvo. Suomalaisen perusopetuksen laadunarviointi rehtoreiden ja opettajien kokemana, Jyväskylä: Yliopistopaino. Sipilä, N., Kestilä, L. and Marikainen, P. (2011), Koulutuksen yhteys nuorten työttömyyteen. Mihin perustutkinto riittää 2000-luvun alussa?, Yhteiskuntapolitiikka 76(2), Vaarama, M., Moisio, P, and Karvonen, S. (2010), Hyvinvointipolitiikka 2010 luvulla, in Vaarama, M., Moisio, P, and Karvonen, S. (eds.), Suomalaisten hyvinvointi 2010, Helsinki: National Institute for Health and Welfare,

16 For a more extended argumentation. The book came out of print in February 2013

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