When the High Road Becomes the Low Road: The Limits of High‐Technology Competition inFinland

Abstract

AbstractGlobalization 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 usesFinland's successful transformation into a high‐technology economy to highlight the significant economic and political risks associated with this strategy. Economically, movement into electronics exposedFinland 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.