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Transnational Learning through Local Experimenting - The creation of Dynamic Complementarities between Economy and Society

Final Report Summary - TRANSLEARN (Transnational Learning through Local Experimenting - The creation of Dynamic Complementarities between Economy and Society)

Until recently, the financialisation of the global economy, the transcontinental penetration of multinational corporations, the shake ups of national champions, and the off-shoring of all kinds of operations were seen as challenges to, in particular, the Nordic Welfare States. But instead the Nordic countries have surprised observers. Despite high taxes, high unionisation rates and egalitarian income distribution they have demonstrated that it is possible to improve competitiveness, secure macro-economic balances, lower unemployment and engage a high proportion of women, youngsters and senior people in economic activity.

A number of explanations have competed to understand this paradox. Norway's oil; Finland's Nokia and the copying of Sweden's famous innovation system; and Denmark's flexicurity stand out in the debates in Europe. But all these explanations are very general and do not really account for how the interaction among firms, entangled in global games, and national institutions, constantly pressured for reforms, have changed since the first oil crisis. In our view, this interaction constitutes a new force field and arena in need of further investigation as this is probably where we shall find the explanations for how firms and employee groupings have turned the institutions of the welfare state into enabling devices that they can use for coping with globalisation and growing uncertainties.

Our main thesis and conclusion is that in the Nordic countries exposures to the openings of global economy have been facilitated by the co-evolution of experimentalist business systems and the institutional practices and resources embedded in the welfare state. Managers, employees, entrepreneurs and citizens have been able to draw on the resources that are available in their institutional settings. The distinctiveness of the Nordic countries have been widely recognised with respect to the quality in education, public welfare services, active labour market policies and further training; their governance systems, rooted in local autonomy and widespread use of open corporatist negotiating bodies, make it possible to coordinate and make novel use of institutions. Different types of actor coalition across sectoral divides are also pro-actively searching for new methods to share risks with a wide scope of stakeholders. Slovenia has been used in the project as a test case to sensitise us with specificities of the Nordic countries as such and to explore whether a transitional country that has become an EU Member State is able to follow the evolutionary path taken by the Nordic countries. In the name of our project we used the concept 'transnational learning'. This report is only setting the scene for discussing what transnational learning could mean in the constantly changing global economy. Our position is that a prerequisite for transnational learning is the availability of comparative national case studies that reveal the complexity of institutional settings that are relevant and must be taken into account when evaluating the renewal capability of companies in global value constellations, facilitating opportunities for citizens to participate in the global knowledge based economy, and designing potential policy measures for such objectives. The path-dependency of national systemic models is the first obstacle for any kind of emulation of institutional reforms or transfer of sub-systemic best practices trans-nationally. The second obstacle is the periodically changing architecture of the global economy. Global level contextual changes may close windows of opportunities for distinct national economic trajectories that existed before certain structural landslides. That is why documentations of even small-scale experimentations may have relevance beyond their immediate institutional context, because they render visible such enabling institutional resources that are not conceived in other institutional contexts. Such contrasts may lead to searches for analogical or substitutive resources and thus enable actors to find new paths in their existing institutional contexts.

The basic message for policy making derived from the TRANSLEARN project can be formulated in the following way: the renewal of business in the global economy calls for new risk sharing approaches and methods for citizens. There is a need to turn passive welfare services to an enabling mode in cooperation with companies, employees, the civil society and the public sector. Proactive risk sharing is needed because of the increasing uncertainly in working life and the pressures felt in private life by employees that are active in global business operations. Proactive risk sharing is also needed to stimulate employees' risk taking in working life and in engaging in life long learning. Such inferences have been done from the national case studies conducted in the Nordic countries that have extensive exposure to knowledge-intensive business activities, currently driving the global economy. Nordic companies and Nordic subsidiaries of multinational corporations have succeeded well in creating and renewing knowledge-intensive business activities as well as discovering new roles in global value constellations. Employees working in customer interfaces, support processes and innovation projects have accumulated communal expertise that has been used to power the steady renewal of business activities. At the background, the high standard of education, the so-called learning organisations, and the various services of the comprehensive welfare society have provided the broader launching pad for development. Yet, the similarities within the Nordic model overshadow the essential disparities, which concern company-specific practices, national institutions in a welfare state, and the participation of citizens. Thus, the case studied conducted provide an interesting learning history that can be used in other countries. For this reason Slovenia was used as a test case, and it turned out that the differences in the availability of institutional resources between the Nordic countries and Slovenia provided relevant perspectives for further exploration in national policy making.

At the same time the research done has alerted to the problems that are related to institutional reforms in the context of a national business system. In the TRANSLEARN project, the starting point was that transnational learning has nothing to do with the copying of best practices and / or transferring formalised procedures from other national contexts to ones own. This assumption is based on the literatures of socio-economic systems that emphasise the path-dependency of systemic change. There is a need to translate institutional reforms to national contexts and legacies by taking into account the complementarities that exist across societal subsystems. By focusing on the Nordic countries that share a wide variety of institutional similarities, especially if compared with other European countries, it was assumed that some kind of best practice transfer would be relevant across these countries. At the level of general templates of action, such ideas have been made explicit above. However, after doing the research we are even more cautious in claiming that transnational learning for institutional reforms across national business systems is possible. One additional factor that has led us to such a stance is the global economic crisis that is causing landslide changes in the locations were different types of economic activities are done. Systemic complementarities that ones have turned out to be successful may not be used again by economic actors in the national business system where the complementarities were once constructed and provided a competitive advantage. Nor can they be implemented in other systemic contexts either, as in most industries the rules of the competitive game are changing dramatically.