Article
Our administrative structures were created under conditions that no longer exist. This makes it difficult to manage long-term challenges such as demographic change, argues a new publication by Sitra and The Institutional Architecture Lab (TIAL).
Asiantuntija
Topic
Economic growth
Published
17.10.2025
The Rethinking Institutions in an era of Demographic Transition report offers concrete proposals tailored to Finland’s situation, along with international examples of how institutions can be reformed to meet the needs of today and tomorrow. According to the report, reform and foresight are essential if Finland is to respond effectively to the changes brought about by demographic development.
Demographic change is challenging the foundations of society: aging populations, declining birth rates, and migration trends directly affect the sustainability of the welfare system, labor markets, and agility of governance.
The report highlights the need for new structures and practices that transcend administrative boundaries – enabling shared situational awareness, information sharing, and coordinated action. For example, cross-governmental collaboration on population policy could support long-term planning and decision-making.
Sitra’s expert Emma Honkala sees demographic change as an opportunity:
“If we use strategic foresight to support decision-making, we can reform our society and turn demographic challenges into drivers of sustainability and innovation,” she says.
The report also presents international examples, such as Singapore’s Ministerial Committee on Ageing, which operates through inter-ministerial cooperation.
TIAL’s founder Juha Leppänen reminds us that Finland holds a unique global position:
“Many Finnish institutions are still admired around the world. The comprehensive school system is a good example of this. Now we need the same imagination and effort to build new institutions. Sitra and TIAL worked together to identify demographic issues where there was a particular demand for new institutions.”
Funded by Sitra and produced by TIAL, the publication outlines five focus areas and practical examples of how societal structures can be made more agile and resilient. The goal is to inspire policymakers and societal actors to think differently and act together—both in Finland and internationally.
In May, Sitra published a memo Suomen väestö ja kansantalous uuden edessä (summary in English), which examined the impact of demographic forecasts on employment, growth, and the sustainability of public finances.
Sitra is currently exploring how cross-sectoral collaboration on population policy could be implemented in Finland. In addition, Sitra supports the retention of international students in Finland by funding the Future in Finland initiative run by Suomen Mentorit.
Sitra’s new strategy came into effect in September 2024. Accelerating sustainable economic growth will increasingly guide all of Sitra’s work and choices. Finland must prepare for very different futures in terms of both population and economic development.
Institutional innovation refers to the intentional and strategic renewal of governance structures and operational models. Institutional Innovation is the capability, mindset, and ongoing practice that helps identify potential emergent institutions and/or enable institutions to experiment, adapt, and evolve in response to changing societal needs.
The goal is to build institutions that are more adaptive, inclusive, and transparent – capable of functioning in a complex and evolving environment. This requires the ability to question established ways of thinking, envision alternative futures, and imagine new ways of operating in our changing society.
A familiar example of institutional innovation in Finland is the establishment of wellbeing services counties, the aim of which was to ensure equal access to social and healthcare services in the context of an ageing population and increasingly limited resources.
Specialist