The Scandinavian challenge - The future of advanced welfare states in the knowledge economy

The Scandinavian countries - Denmark, Norway, Sweden and Finland - have developed a particular model of welfare, employment and economic governance. It is based on universal access to tax-financed social services and social insurance, full employment secured by expansive macro-economic policies and active labour market policies, highly organized labour markets, corporatist interest mediation, and so on. This article surveys the response of the Scandinavian socio-economic model to the challenges of economic globalization and the rise of a knowledge-based economy. It has repeatedly been stated that this changing economic model 'requires' labour market deregulations, tax cuts and privatizations of public services. The experience of the Scandinavian countries in the 1990s indicates that it is possible to retain traditional commitments to employment and social security by developing active policies for industrial renewal and support of innovation systems, technological development, scientific infrastructures and regional concentrations of industrial competence.