The Dynamics of Innovation in Eastern Europe -Lessons from Estonia

University dissertation from Edward Elgar Publishing (Cheltenham, UK, and Northampton, MA, USA)

Abstract: The overall interest pursued in this thesis is how the former socialist economies of Central and Eastern Europe can build strong and dynamic systems of innovation. The purpose of the thesis is to investigate the dynamics and evolution of the telecommunications system of innovation in Estonia from the late Soviet period to Estonia's EU accession, and to provide an in-depth explanation of how innovation has been enabled to occur in the system. Underlying the study is the empirical observation that the transition from socialism to capitalism in Central and Eastern Europe is a simultaneous process of, on the one hand, a transformation of the old Soviet-era structures into something new, and on the other hand, a reorientation from being deeply integrated economically with other Central and East European countries towards a new integration with the global capitalist system. From a systems-theoretical perspective these two processes can be expected to be closely interrelated. In order to understand and explain the emergence of new East European systems of innovation, the thesis therefore takes into account both system-internal processes of change in Estonia as well as the relationships between the Estonian system and its foreign environment. Based on a case-study methodology and recent theorizing on systems of innovation, the thesis shows that the socialist historical heritage, and in particular inherited competencies, have been used in highly creative ways for generating dynamic innovation in post-socialist Estonia. The thesis also uncovers the complex and multifaceted ways in which the geographical and cultural proximity to Sweden and Finland has been creatively used as a powerful resource in the pursuit of building the Estonian system of innovation in telecommunications. Moreover, the thesis demonstrates that it has been possible for an East European system of innovation to develop highly creative domestic dynamics without necessarily imitating Western system trajectories or styles of innovation. The results are also shown to have important theoretical implications for the study of systems of innovation.

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