9. Small states - Sweden, Netherlands, Switzerland Flashcards
Why does Peter Katzenstein believe small states can have successful industrial policy?
They succeed by staying flexible, adapting quickly to global changes, and focusing on specific market strengths.
Instead of competing on size, they focus on innovation and smart policies to stay competitive.
What were the core components and key changes to the Swedish growth model?
- Sweden are strong in the industrial sector
- They have their own currency (change demand)
- They are very good a consuming.
Why have a small state like Sweden succeeded?
- Because of smart government policies. They invest in education, innovation, and welfare, which create a skilled workforce and attract global companies.
How does Herman Mark Schwartz define the Nokia Risk?
As a country who depends too much on one or a few big companies. If those companies fail, the whole economy can suffer. Finland, Denmark, Taiwan
Considered the similarities and differences between Nokia’s situation in Finland around year 2000 with Novo Nordisk position in Denmark today?
Similarities
- Both dominate their economies - Nokia was 20% of Finland’s exports, and Novo Nordisk plays a similar role in Denmark.
- Both are global leaders in their fields.
Differences
- Nokia operated in a volatile tech industry, while Novo Nordisk is in healthcare, a more stable sector.
- Denmark’s economy is more diversified than Finland’s was during Nokia’s peak.
What are some characteristics of small states
- Open economies with minimal protectionism.
- Fear of retaliation leads to lower tariffs.
- Reactive nature helps adaptability under volatile conditions.
- Emphasis on employment, price controls, and niche market advantages.
What is democratic corporatism?
A system where interest groups compromise, align goals of business, labor, and government, and create stability.
How has Sweden’s growth model evolved?
- They went from a export-led model to an consumption-led model, because they earn more money, so they consume more.
What is the international focus of small states?
Depend on international organizations, contribute to peacekeeping, provide foreign aid, and collaborate in research and development.
What economic traits define small states?
Struggle with large-scale R&D, prioritize economy over security, and have small military budgets.
How do small states handle economic challenges?
Use open economies, avoid protectionism, and adapt to global changes.
What are examples of small state strategies?
Switzerland focuses on banking; Austria emphasizes manufacturing and job creation.
What drives Sweden’s private consumption?
Private consumption is 50-60% of GDP, supported by higher wages and social policies.
What are the three key sectors in Sweden’s economy?
Manufacturing (profit-driven), exposed services (ICT, finance), and sheltered services (real estate, healthcare).
How do higher wages affect businesses in small states?
Push companies to invest in technology and improve efficiency.
