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Finland, where are you headed in 2013?

What will top the trend and phenomena charts in 2013 and help Sitra and its partners shape the future?

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Which fascinating phenomena will make a breakthrough next year? Which should be grabbed at all costs? My work in Sitra’s forecasting operations includes updating the trend and phenomenon charts. Their purpose is to help us at Sitra, as well as our partners, to grab hold of phenomena that are already bubbling under the surface – with some force – but have not yet managed to break through into mainstream thinking. In this blog entry, I list three phenomena that I personally find interesting and that I believe will be the subject of some major action in 2013.

Questioning the prevailing economic viewpoints

The financial crisis that began in 2008 and accelerating climate change have brought new themes into economic discourse. Can we continue on the path of unending economic growth at the cost of the environment? Will we soon see the end of the financial crisis, and will we be able to continue business as usual? Several non-profit organisations have been demanding an open discussion on these themes for years. Economic operators are, however, only just beginning to talk about them.

One of the initiators of this discourse within the scientific community and among the creators of financial policy is the global researcher community Institute for New Economic Thinking, which gathers together dedicated people from Nobel laureates to top scientists, teachers and students. INET has adopted the mission of creating a new paradigm for financial thinking. In Finland, the development of new thinking within the economic operators has been promoted via Sitra’s Sustainable Economy forum, which brings together a mix of specialists to seek ideas on what sustainable economy really is.

What could sustainable economy encompass? When the global and Finnish discourse is summarised, the following ideas come up.

A sustainable economy is in balance with both the ecological and social dimensions of society. Therefore, economy is not valuable per se but a tool for other purposes, also adding to the public’s perceived well-being. Instead of short-term quarterly thinking, the focus is on long-term operations.

In a sustainable economy, everyone is an economic operator, not just the public sector, banks and businesses. Individuals, companies, organisations and social enterprises all play important roles. The concept of core economy is strongly involved, including people’s time, experiences, knowledge and competencies; the value of these is identified and recognised in the sustainable economy. Money is not the only medium of exchange, but will be accompanied by ownership, sharing, time, and ecological debt or capital. Instead of costs, the public sector will focus on social investments. Natural resources are seen as capital, not a raw material. The focus shifts from economic volumes to flexibility and adaptability.

Until now, the economy has been all about performance, but new thinking emphasises sustainability as a whole, with economy, society and ecology as equal building blocks. Mathematical economic theories will be replaced by complexity and adaptivity theories, better suited to studying a complicated system. Instead of growth and competitiveness, concepts and indicators concerning the sources of sustainable economy – such as the impact of separating natural resources from economic growth and the effect of recycling materials – will take over. When natural resources are no longer directly connected to economic growth, perceived well-being will increase while the consumption of natural resources will decrease, together with emissions.

These ideas are already gaining momentum in the South Korean and Danish governments, which are making innovative investments in smart building, town planning, smart power grids and material cycles. These countries aim to make new thinking the basic assumption behind all operations, not an exception.

Read Johanna Kirkinen’s interesting blog entry under Sitra’s Resource Wisdom theme. Such ideological change holds great potential for growth and the increase of perceived well-being. Operators such as the OECD have also initiated discourse on the change in the economic paradigm and the necessity of green growth.

The discourse is currently bubbling under, and I look forward to seeing whether it will become mainstream thinking in the financial policy discourse of 2013, and whether the potential of new thinking is also discovered in the world of politics.

What is new democracy?

I believe that the crisis of democracy is a fact. The turnout for the 2012 local elections in Finland was only 58.8%, and that of the presidential election 68.9%. At the same time, Europe is in turmoil, the social peace of Greece is cracking, and while decisions are taken to make Europe a closer union the creation of democratic structures across national borders seems immensely difficult.

People have learned to bypass the traditional democratic channels and to invent and change the methods of participation as they see fit. In the last decade, fast technological change and the opportunity to interact regardless of physical location have created entirely new kinds of participation, communities and tools for democratic supervision.

Still, there are bigger questions without answers. What are the issues of the 2010s around which political parties could regroup? What is required of a constitution in the digital era? In the early days of the industrial revolution, factories were founded around river rapids, and new communities were born; where are the river rapids of the 2010s to gather people and new democratic methods?

Piloting culture

Piloting culture has been a powerful new player in 2012. I believe that this fast method of testing solutions and getting things done will gain ground in 2013. Piloting culture is about testing an idea with no heavy structures, with a small budget, already in the testing stage. This allows further development and refining of the idea together with interest groups. Finland is the Promised Land for various reports, and we are suffering an overdose. I believe that all readers of reports know that there is no shortage of solutions for all challenges great and small. It is the implementation that lags behind. When piloting is carried out early in the process, implementation of good solutions may be much easier.

I could wish for a favourable wind of change. However, wishes alone are rarely enough; brisk action and an open mind, on the other hand, will do the trick. I welcome the year 2013!

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