Monday, October 24, 2011

HAMALAINEN Timo, KOSONEN Mikko,
DOZ Yves L.
INSEAD Working Paper 2011/110/ST

Governments in industrialized societies are facing a historical adjustment challenge. The current technological revolution and the transformation of the world economy are fundamentally changing their societies and operating environments. The social and institutional adjustments to the new techno-economic realities are not easy. In the long historical perspective, the recent economic turmoil can be understood as a structural adjustment crisis (Freeman and Perez 1988). The crisis has led to unsustainable levels of public borrowing which will ultimately force governments to rethink their role and tasks in the society. The required budget cuts and structural changes will present unprecedented renewal challenges to the public sector.