When Small States Make Big Leaps (Cornell Studies in Political Economy)

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9780801450921: When Small States Make Big Leaps (Cornell Studies in Political Economy)
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"At a moment when the West is confused on what to do next, Darius Ornston provides us with a remarkably detailed comparative account of the search for solutions to a previous crisis. He demonstrates how the coordinated market economies of Denmark and Finland, by making creative use of corporatism, could transform institutions and move from low- to high-tech societies during the 1990s. These lessons are highly significant for locating theoretically the sources of institutional and social innovation and the capability for searching for new phases of prosperity."-Peer Hull Kristensen, Copenhagen Business School "When Small States Make Big Leaps is a first-rate book that adds substantially to debates on European political economy and corporatism. Darius Ornston argues that some small European states have invented a new 'creative' corporatism that turns economic pressure into targeted political pressures that both motivate and enable new kinds of tripartite deals to deliver supply-side benefits. Throughout, Ornston distinguishes among industrial policy, labor market policy, and developments in capital markets. I found this very enlightening and provocative."-Wade Jacoby, Brigham Young University, author of Imitation and Politics: Redesigning Modern Germany

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At the close of the twentieth century, Denmark, Finland, and Ireland emerged as unlikely centers for high-tech competition. In When Small States Make Big Leaps, Darius Ornston reveals how these historically low-tech countries managed to assume leading positions in new industries such as biotechnology, software, and telecommunications equipment. In each case, countries used institutions that are commonly perceived to delay restructuring to accelerate the redistribution of resources to emerging enterprises and industries. Ornston draws on interviews with hundreds of politicians, policymakers, and industry representatives to identify two different patterns of institutional innovation and economic restructuring. Irish policymakers worked with industry and labor representatives to contain costs and expand market competition. Denmark and Finland adopted a different strategy, converting an established tradition of private-public and industry-labor cooperation to invest in high-quality inputs such as human capital and research. Both strategies facilitated movement into new high-tech industries but with distinctive political and economic consequences. In explaining how previously slow-moving states entered dynamic new industries, Ornston identifies a broader range of strategies by which countries can respond to disruptive challenges such as economic internationalization, rapid technological innovation, and the shift to services.

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