Employment generation potential of new, technology-based firms during a recessionary period: The case of Finland

This article analyzes the employment,oeneration potential of new, technology-based firms during a recessionary period. The empirical data is from Finland, a country that was hit particularly hard by the economic recession between years 1990 and 1993. In spite of the recession, the number of NTBFs (new, technology-based firms) rose by 17% from 1986 to 1993. In traditional manufacturing industry branches, the overall employment fell by as much as 33% during the same period. Alternative hypotheses to explain the increase in the importance of NTBFs are presented and discussed in the light of research findings. Both flexible specialization and recession-push hypotheses receive support in the empirical data.