When the High Road Becomes the Low Road: The Limits of High-Technology Competition in Finland

Darius Ornston

Review of Policy Research, 2014, vol. 31, issue 5, 454-477

Abstract: Globalization has generated increasing interest in technology-intensive industries as a way to sustain national economic competitiveness. High-technology growth is often conceptualized as a “high road” to prosperity, more amenable to private–public, industry–labor, and interfirm cooperation than tax, regulatory, or cost competitive strategies. While specialization in technology-intensive industries does deliver several benefits, this article uses Finland's successful transformation into a high-technology economy to highlight the significant economic and political risks associated with this strategy. Economically, movement into electronics exposed Finland to cost competition and disruptive technological innovations. Politically, high-technology competition weakened the solidaristic ties that characterized postwar capitalism and the coordinating capacities that underpinned economic growth. In short, high-technology growth exacerbated the problems it was supposed to solve. The article concludes by generalizing the argument to several non-Nordic states.

Date: 2014
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