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2. Institutional models of the networksociety: Silicon Valley and FinlandPekka Himanen and Manuel CastellsThis chapter emphasizes the institutional and cultural diversity of networksocieties around the world. It focuses on a comparison of the two networksocieties that have for many years topped the global rankings in technologicaladvancement and economic competitiveness. What makes the comparisonespecially interesting is the fact that their dynamic performance has beenbased on very different social and institutional models. The model of theUnited States – which we call the “Silicon Valley model” as this region is itsmost dynamic area and, indeed, its symbol – is based on unfettered capitalism.There is widespread belief among leading political and business circlesthat an advanced information economy is only possible by replicating thesuccessful Silicon Valley model. Therefore, whether by competition ordesign, it is the Californian experience that has shaped public perception ofthe global rise of the network society.However, the Finnish model factually contradicts this belief. Finlandoccupies the leading position in the United Nations index of technologicaldevelopment, and it was ranked as the most competitive economy in theworld by the World Economic Forum in 2003. It is also a trendsetter in someof the key technologies, such as mobile telecommunications (in which Nokiahas roughly 40 percent of the world market) and open-source software (inwhich the Linux operating system runs the largest part of the World WideWeb). Yet the process of technological development and economic growth inFinland has been actively steered by the government. And Finland, in sharpcontrast with Silicon Valley, features a comprehensive welfare state, whichincludes free, public, and high-quality education, including student grants foruniversity; a mostly free, public, and high-quality health care system, whichis open to everyone regardless of employment status; universal unemploymentand pension protection; and a universal right to low-cost, public childcare run by child-care specialists with college-level education.At a time characterized by the tension between the rise of the globalnetwork society and social movements attempting to re-establish socialcontrol over market forces, a comparison of the Silicon Valley model and the49