Hybrid Role of Soft Innovation Resources : Finland's Notable Resurgence in the Digital Economy

Finland and Singapore are easy to compare, they are the same size and have similar positions as global digital leaders. however, their performance is differing a lot. from 2006 to 2013, Singapore’s GDP growth rate was tenfold compared to Finland. four years later, in 2017 Finland is exceeding the growth rate of Singapore. what are the reasons for the success of Finland? An empirical analysis of the factors contributing to GDP growth and the effects of the policy change was conducted. It was demonstrated that increase of export did not explain growth, but shifts in capital formation did. New dynamics was revealed that was triggered by the removal of structural impediments (hindrances) and by increasing use of soft innovation resources. The virtuous cycle of increase of uncaptured GDP, increased multifactor productivity and growth of tangible capital and GDP was described. An insightful suggestion for activating a hybrid role for soft innovation resources in the digital economy was thus provided.