Employee ownership as a catalyst for generational change and growth

An estimated one-third of generational transitions fail when no successor can be found within the entrepreneur’s family or on the market. Employee ownership offers one potential solution. In this model, company employees gradually become owners with decision-making power.

“Employee ownership does not replace traditional ownership models but complements them. At its best, it helps secure jobs, supports regional vitality and strengthens Finland’s economic growth,” emphasises Petri Rouvinen, Senior Adviser at Sitra.

The practical implementation of the model is outlined in Sitra’s memo “Employee ownership in companies as a partial solution to Finland’s challenges – A proposal for a pilot model in Finland” (memo in Finnish, summary in English), authored by Andy Farquharson, founder of a better monday EMEA oy, and Petri Rouvinen.

According to the authors, international examples show that employee ownership can strengthen company growth and productivity.

For the company, the exiting owners and its new owner-employees, the change is significant: “Employee ownership isn’t a magic wand, done right, sellers exit at fair value while preserving their legacy, employees gain real equity and dignity in their work, and communities keep resilient businesses. Fifty years of evidence shows ownership alone doesn’t create success, capability, education and governance do,” underlines Andy Farquharson.

The arrangement typically requires external bridge financing, enabling ownership to be gradually transferred to employees.

Pilot Needed in Finland – Legislation and Incentives on the Agenda

Employee ownership is worth piloting in Finland. At the core of the pilot could be a bridge fund that purchases companies from ageing entrepreneurs and gradually transfers ownership to participating employees.

“Economic growth is created in companies, but it needs long-term, inclusive policies to support it. A pilot will provide insights into what kind of model best serves Finnish companies,” says Rouvinen.

For employee ownership to become common, it must be recognised in legislation. Incentives should also be considered, especially to activate existing owners and bridge financiers.

Among European countries, Denmark and Slovenia will introduce laws supporting employee ownership at the beginning of 2026. In the United States and the United Kingdom, such ownership arrangements are already commonplace.

One of Sitra’s roles is to research and pilot new societal innovations—operating models that enable and support sustainable growth, competitiveness and well-being. Employee ownership in companies is one such promising model.