The Information Society and the Welfare State: The Finnish Model (review)

In this book, Berkeley scholars Manuel Castells and Pekka Himanen try to answer the question: How does Finland combine its impressive information society with its welfare state? The authors give this definition of the information society: "The defining activities in all realms of human practice are based on information technology, organized (globally) in information networks, and centered around information (symbol) processing" (p. 1).

Castells and Himanen begin with a comprehensive introduction to the rise of the Finnish information society, including thorough analyses of Nokia, the IT sector, and the Finnish innovation system. The authors argue that specific historical, cultural, geographic, climatic, ethnic, and religious features made it possible for Finland to reach the apex of the global information society. The cold winters, the late industrialization in the 1950s, the deep recession between 1990 and 1993, and the dominant influence of first Sweden and then Russia made for a history of physical, economic, political, and cultural survival, which the authors see as important reasons for Finland's highly developed information society. For instance, in the 1980s, when the Finnish government showed a great interest in joining European technology programs, it was not only because of a strong desire to force technological development itself but also because the state saw this as a way of becoming closer to the West and not provoking Soviet protests. And contrary to most developed countries, Finland did not see the information society as a threat to its cultural identity. Since the Finnish nation-state has only existed for three generations, the country still is searching for its identity. Therefore, according to the authors, when the information society emerged in the 1990s, it was welcomed as a new identity in many ways more appealing than the former images of a forest country and a Soviet satellite state.

Castells and Himanen conclude that the evolving Finnish information society is closely connected to the Finnish welfare state in a mutual dependence. On the one hand, the economic power of the IT sector is the basis of the generous Finnish tax-financed welfare state. In 2001, the Finnish IT sector accounted for an impressive 45 percent of the Finnish gross domestic product. On the other hand, the Finnish welfare state is committed to socially sustainable development of the IT sector. Free health services, free universities, unemployment insurance, and relatively high state spending on research and education foster a robust recruitment atmosphere for the IT sector. The positive effect of this combination can be seen in the statistics of social exclusion. Since the information society began to emerge twenty-five years ago, the numbers in Finland have shown rising social inclusion, in marked contrast with the United States, with its minimal welfare system.

Nevertheless, the authors also point out several problems. For instance, the Finnish welfare state's traditional protections for labor appear more favorable toward IT sector professionals than for the labor force at large. Beside the slow rise of new inequalities, another major problem is the difference between the network structures of the information society and the hierarchic and subordinated structures of bureaucracy. The advanced Finnish goals for information technology use in education and health care often got stalled by the welfare state's typically slow IT implementation process. In this regard, Castells and Himanen have an interesting hypothesis: "The Finnish combination of an information society and a welfare state ultimately is an optical illusion, hiding the fact that the information society is rising while the industrial society is beginning to fade away with the old system still in place" (p. 4). Unfortunately, the authors do not pursue this very interesting statement further. There also seems to be a confusion regarding the terms industrial society and welfare state; when the authors later repeat their hypothesis, it is no longer the industrial society but, rather, the welfare state that they see fading away (p. 81). The authors should have defined their notion of...