Workplace innovation in Finland: Towards sustainable productivity growth?

Abstract

This paper examines challenges that Finnish companies are facing in the global productivity race and means they have used in responding to these challenges, with a special reference to work organization, personnel competence development and utilization of external sources in acquiring new knowledge. In recent years, Finnish companies have been actively modernising their work organization. In the ‘innovative work organization index’ developed by Valeyre et al. (2009), for example, Finland ranked third of all the EU27 countries in 2005. One special feature of Finnish companies’ modernization strategies compared with those of the other highest ranking countries – Sweden, Denmark and the Netherlands – was a more widespread use of ‘lean production’ approach, whereas in the dissemination of ‘discretionary learning’ forms of work organization Finland was lagging behind these three countries. In concrete terms and in comparison with the other highest ranking countries, Finnish companies have laid more emphasis on teamwork, task rotation, multi-skilling and decentralization of quality control in their strategies to renovate work organization, while less notion than in Sweden, Denmark and the Netherlands has been paid to increasing individuals’ autonomy and variety in work and reducing constraints that pace work. These differences may be explained by the strong engineering orientation in Finnish management culture, the lesser influence by the socio-technical systems design approach and the fact that quality of working life entered the Finnish policy agenda later than in the three above-mentioned countries (Alasoini, 2004; Kasvio, 1994; Koistinen – Lilja, 1988). This paper examines work organization modernization strategies of Finnish companies with the help of establishment-level data and by looking at companies in industry and private services separately, with a view to finding similarities and differences in the operation logics and change strategies between these two sectors. The paper includes an analysis on decision-making structures, nature of teamwork, personnel competence development practices and utilization of external sources of knowledge in these two sectors. The empirical material is based on a survey, carried out by the Finnish Workplace Development Programme TYKES (2004–2010). The paper starts with an introduction to different approaches to workplace innovation in companies and to different policy options in tackling with the problem of low level of workplace innovation in Europe. Thereafter, the paper provides an overview on the main problems facing Finland’s future economic growth and on policies to promote workplace innovation. Thirdly, the article presents the survey data and results. Finally, conclusions based on the empirical analysis will be drawn.