Three leaps towards a better future

Throughout the ages, Finland’s success has been based on two basic pillars: skilled people and the ability to renew. The post-war rise to become the world’s best educated nation was a miracle of its time.  

Now we are on the verge of a slowly progressing but dramatic transformation, and it is not clear how we will survive it. The number of working-age people is decreasing, the level of education is declining, and new innovations are needed faster than they are being created.  

On the more distant horizon, an even more fundamental change awaits: if the birth rate remains at the current level, each generation will be significantly smaller than the previous one. Within a few generations, without immigration, there would only be about a million Finns. A shrinking population is not only an economic challenge but also raises a deeper question about the kind of role Finland and the Finnish people will play in the world. 

At the same time, our ecological debt is accumulating. The climate and nature cannot withstand current consumption, and turning our attention to other issues as a result of Russia’s increased military threat will not help to solve these issues. 

All this forms a framework within which Finland must be able to make major decisions. We must look far ahead but act now.  

The decisions of Sitra’s Supervisory Board on 25 November are our response to Finland’s key challenges. At Sitra, we are taking two significant leaps towards solutions, and with the third leap, we are making them possible. 

In the coming years, Sitra will make one of the largest investments in its history to enable the public sector to harness artificial intelligence. 

The general government deficit is chronic and does not seem to be being fixed through savings alone. Yet, there is no longer room to continue the previous way of working. Technology offers an opportunity to renew operating models, but above all, it is a matter of people and leadership.  

On Tuesday, Sitra’s EUR 50 million special investment was confirmed, the aim of which is to increase the productivity of the public sector and support Finland’s pioneering role in the use of artificial intelligence. Not through individual applications, but by building new kinds of common operating methods together with the authorities and municipalities, where technology supports people rather than the other way around. 

If we succeed, others around the world can learn as well. If we succeed together with Finnish companies, they will gain evidence that can give them confidence to test their wings internationally.   

The second leap is targeted at domestic growth companies with an investment that is significant for us, both in principle and strategically. 

In the next few years, we will allocate EUR 150 million to Finnish private equity funds that will finance and stimulate growth companies and help them keep them in domestic ownership for a longer period.  

In practice, this means that Sitra will direct funds repatriated from investments elsewhere to Finland. We are seeking cooperation with other significant domestic investors in order to jointly take our capital markets to the next level, better supporting the growth of our best companies.  

The responsible goal is twofold: successful investments in the best growth companies, whilst at the same time strengthening Finnish ownership. 

Long-term challenges such as climate change and low birth rates are transforming societies everywhere. Some of these changes will affect Finland more quickly and more intensely than other countries. We also face the challenge of a drastic structural change in the corporate sector. First, we lost mobile phone production, and now even the forest industry’s contribution to our economy has also withered into a shadow of its former self. 

Therefore, we urgently need the means by which Finland can return to the path of a sustainable economy and renew itself at the same time. Sitra’s strategy, which was confirmed last year, places sustainable economic growth at the heart of our work.  

This is why Sitra is also taking a third leap. We are reducing our own costs so that we can help others, and making substantial changes to the way we operate and allocate our resources.  

By 2027, Sitra will direct funding to societal reforms at a level eight times greater than the amount we allocated in 2024.   

To achieve this, we are realising Sitra’s investment assets. The number of personnel in domestic operations financed by capital returns will decrease by about a third compared to a couple of years ago. We are aiming for over 20 per cent savings in operating expenses. International activities will be transferred to external funding, which will also free up resources to support Finland’s transformation. 

Tough choices, but without them, the first two leaps would not be possible. 

Crises force you to think about things in a new way, so they always involve the possibility of change. In my view, Finland is now experiencing such a moment.  

To boost the economy and growth, we need innovative solutions and the ability to put them into practice. Sitra is fully committed to this shared effort.