Emerging innovative networks and milieux: the case of the furniture industry in the Lahti region of Finland

Abstract

A crisis might be a start for something new. Loss of competitive edge in a major Finnish furniture industry agglomeration was observed in connection with the downward trends on the domestic market. This, combined with severe recession, was reflected in bankruptcies and job loss. Many advantages of the agglomeration were not utilized, partly because of distant or arm's‐length relations between different actors in the local milieu. During the recession, the value of the closer relationships was discovered, whereas the processes to unlearn some old institutions have only just begun. These processes of innovative network development, as well as problems and prospects connected to them, are analyzed in this article.