needed for good economic performance and, that by focusing on social innovations it might be possible to gain deeper understanding on transformation ...
Hämäläinen, Timo J. & Risto Heiskala (eds) (2007) Social Innovations, Institutional Change and Economic Performance: Making Sense of Structural Adjustment Processes in Industrial Sectors, Regions and Societies. Edwar Elgar in association with Sitra, the Finnish Innovation Fund: Cornwall. 352 pp, HB, £79.95, ISBN 9781847202536. Markku Sotarauta – Book Review For once the title says it all. To put the book edited by Timo Hämäläinen and Risto Heiskala short, it aims to explain it all. “Social Innovations, Institutional Change and Economic Performance” aims to make sense of structural adjustment processes not only in industrial sectors but also in regions and societies. As the editors note in the introductory chapter, the historical paradigm shift has created a major structural adjustment challenge for the industrial societies and, as we have read over and over again, the old socio-economic structures inherited from the previous eras do not match with the rapidly emerging technological and economic environment. Hämäläinen and Heiskala argue for comprehensive and systemic innovations and structural renewal instead of investing only in research and development. It is easy to agree with them. They also maintain that the rapidly expanding body of innovation studies does not advice policy makers on how to respond to the major structural adjustment challenges. So, the book aims to shed new light not only on the theoretical side of the coin but on the policy side too. Hämäläinen and Heiskala declare themselves as believers in general theories and, in their case, the question is about a general theory of social innovation that could be applied at various analytical levels. The book argues that social innovations are needed for good economic performance and, that by focusing on social innovations it might be possible to gain deeper understanding on transformation processes. And indeed, there is an obvious theoretical blind spot in relating transformation in the techno-economic subsystems to more slowly changing socio-institutional subsystems. Hämäinen’s and Heiskala’s effort to construct a general theory of social innovation for structural adjustment is bold indeed, and it is consciously so, as they note, “such a theory would be a real breakthrough in social sciences as well as in private and public policy making”. Be it as bold as it may, there is a constant demand for theoretical steps forward that aim to provide us with insights on ‘big things’, and hence, in these times of extensive flow of case-studies, this effort is to be warmly welcomed. The book is divided into two parts. The two chapters of the first one set the current techno-economic transformations into a longer historical perspective and elaborate the key concepts of this entire endeavor. The two chapters, “Social innovation, structural adjustment and economic performance” by Hämäläinen and “Social innovations: Structural and power perspectives” by Heiskala, are designed to be complementary and provide the conceptual framework for the case analyses and the general work-inprogress theory. Both of the chapters are conceptually rich and thoroughly contemplated accounts of the main themes of the book. However, instead of being in line with each other they seem to propose two rather different models of social and institutional change. Heiskala emphasizes the importance of analyzing those social innovations that reshape institutions instead of studying the institutions themselves. Hämäläinen on his behalf is interested in society’s structural adjustment capacity and abilities to accommodate new ideas and practices. He is especially keen on finding
ways to lessen the rigidities that lock us into the past trajectories and, he emphasizes deliberate learning as a key in institutional adjustment. The lead chapters reveal both the strengths and weaknesses of the book. Throughout the book the reader can sense the enthusiasm and genuine search for new theory. This should be applauded as such. Simultaneously the reader remains perplexed with a variety of approaches and definitions of the key concepts. Given that the two lead chapters, written by the editors, are preceded by a “Prefatory chapter” in which W. Richard Scott introduces his well known take on institutions and social innovation and, that each of the four case chapters create their own conceptual framework, there indeed is a plethora of definitions and approaches. In his chapter, Spender provides a short but useful discussion on how the editors themselves differ in their definitions of social institution. According to Spender, Hämäläinen aligns himself with what is called the ”new institutional” position in sociology (Powell & DiMaggio 1991) and Heiskala with a dialectical position. Spender adopts the latter model to examine the complex relationship between the US auto industry and national and local policies. Gerd Schienstock moves to elaborate the problems occurring when an economically successful region is confronted with an economic recession. Schienstock draws more on evolutionary economics and takes the concepts of path dependency and path creation on board. Schienstock’s chapter is an insightful account on the changes in the iconic German region, Baden-Wurttenberg, and more broadly on German model. In addition to the German case, the reader learns about Swedish path to new economy (Gunnar Eliasson) and about the Ireland’s path from ‘the poorest of the rich’ to ‘Europe’s shining light’ (Julia S. O’Connor). Eliasson’s and O’Connor’s chapters are rather straightforward case studies and they do not aim to contribute to the conceptual discussion or to utilize the framework designed by the editors. The reading of the nine chapters and the prefatory chapter by Scott leaves the reader perplexed but conceptually well informed, exhausted but excited and a little bit confused with loads of new questions. Social innovation is a highly relevant concept for the future enquiries on innovation systems and more broadly on societal structural adjustment and, even though “Social Innovations, Institutional Change and Economic Performance” does not provide us with a general theory or definite answers on how to study structural adjustment, it is highly useful in framing the huge issues of institutional change and economic performance from social innovation point of view. Unfortunately, the concept of social innovation remains in the air. The book increases our understanding on the many dimensions of it but does not actually define it. Perhaps it is one of those concepts that we can only frame and use as an analytical tool as well as we can but not exhaustively define. It goes without saying that the concept of social innovation provides not only seductively topical but also positively wholesome counterweight to more technologically oriented literature. The problem, however, is that when one presses harder to pin down the idea, its inherent appeal and the search for conceptual clarity and precision is tested by theoretical complexity, ambiguity and frustrating conceptual flexibility. In sum, “Social Innovations, Institutional Change and Economic Performance” delivers a collection of conceptually thick accounts on important themes on relevant and eternally important issues. It can be recommended to all the students of institutional and structural change at all levels of expertise.
