Heiki Lemba

Title: ‘Evolution of Systemic Differences in the Elements of National Systems of Innovation: Comparison of Finland and Estonia 1980-2000

Supervisor: Prof. Dr. Rainer Kattel

Opponent: Dr. Tarmo Kalvet, Senior Research Fellow

Defense: 14 June 2010

Abstract: This thesis considers the retrospective comparison of national systems of innovation (NSI) in Estonia and Finland during 1980-2000 according to the research question submitted by the author: What are the systemic differences in the elements of national systems of innovation that formed the economic restructuring and technological development qualitatively different in Finland and Estonia 1990-2000? Estonia and Finland may seem similar because of an active role of information and communication technology (ICT), foreign direct investment (FDI) and free trade. Both countries were industrial latecomers and followed the catching up strategy. However, the state`s action in foreseeing and implementing policies related to national competitiveness differ in both countries. Closely tied to each other historically and culturally, and situated side by side on the different shores of the Finnish Gulf, Estonia and Finland experienced varying economic development. This is mainly because of a distinct elaborate construction of NSI - Estonia and Finland developed the innovation systems remarkably differently. The latter gives a cogent argument to compare Estonia’s and Finland`s NSI and analyse the determinants that made the NSI competitive or rather uncompetitve, which is the rationale of the current comparison and this paper.

Keywords: national innovation systems, systemic failures, small states, R&D policies and policy coordination, networking