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This book is an original study of why and how Nordic countries by the turn of the century rated at the top on many socio-economic performance indexes. Why did they adapt to globalization and the knowledge economy in a comparative successful way? The introductory chapter argues that the Nordic countries have been able to create new forms of economic organization because welfare institutions made it possible to work in novel ways. The chapters on Finland, Denmark, Norway, and Sweden reveal the dynamics and transformations of their national business systems, and the emerging new patterns of interaction between firms, labour markets, and institutions. Focus is on how firms operate globally, how they organize internally, and how they interact with local and national institutions to tap into open innovation networks in highly surprising ways. These case studies show significant differences among the countries but also great similarities concerning how they are able to construct and de-construct complementarities. The concluding chapter interprets comparative findings and suggests how an experimentalist economy backed by enabling and risk-sharing welfare institutions might be further elaborated. The book crosses the usual boundaries between studies of welfare regimes, varieties of capitalisms, and national innovations systems. It also speaks directly to current high-profile policy debates within and beyond the European Union.

The Nordic welfare states have been at the top of the lists of national competitiveness throughout the 2000s. The Nordic welfare model is deemed able to combine equality, welfare and economic efficiency. Among the Nordic countries, Finland has been considered as an epitome of information society, of high-quality education and systemic innovation policy. In order to make sense of the Finnish development, this book puts political economy, innovation studies, welfare state research, organizational institutionalism and cultural-historical psychology into dialogue with each other. It develops an approach of studying institutional change and learning based on cultural-historical activity theory. This approach is used to analyze the emergence and development of the Finnish comprehensive school system. The steadfast success of Finnish students in the PISA studies shows, against neoliberal principles, that a public school system inspired by educational equality can achieve excellent results with moderate costs. The book outlines a model of an enabling welfare state which develops further the capability cultivating universal services created by the welfare state in the 1960s–1980s. In future these services — produced by multi-professional collaboration — will be increasingly tailored to meet the needs of different individuals and specific life situations. They enable citizens to cope with risks and to meet the challenges of the rapidly changing labour market. An enabling democratic welfare state fosters local experimentation as well as learning in collaborative communities and developmental associations. It mobilizes well-educated professionals and practitioners to innovate in all spheres of society and in this way deepens democracy within the society.