Anticipatory innovation governance: Towards a new way of governing in Finland

Executive summary

Today governments must respond to constantly emerging challenges as disruptions due to widespread events and processes connected to climate change, migration, pandemics, geopolitical security, and others quickly develop and demand public policy actions. While Finland may face some of these more acutely than others, it is not alone in this new reality. In this environment, in which complex, interconnected systems and the problems they contain confront governments with a perpetual barrage of novel types of problems, a reactive approach to setting policy is proving increasingly inadequate.

Recent OECD work laid out a principled framework on how governments can start addressing these challenges by integrating anticipatory capacities into public governance and policy steering. This framework is known as anticipatory innovation governance (AIG). Adequate action starts with the willingness to embrace radical uncertainty and complexity, and to put forward the right tools and governance to make sense of new developments as they emerge, adopting a prospective and proactive stance towards them.

Finland is internationally recognised for its achievements in public sector reform and for its focus on the constant enhancement of its public governance. The country is known for high respect for the rule of law, human development, democratic integrity, and high levels of administrative ethics. While Finnish society and public governance are leaders per numerous international comparisons, one of the areas where the Finnish Government has identified a need to improve concerns anticipation and systems approaches to complex problems.

In 2020–2021, the OECD carried out an assessment of the governance system in Finland, specifically focused on assets, preconditions and gaps within the wider public sector policy making and steering system in Finland that may stand in the way or help implement an anticipatory innovation approach in the Finnish context. This initial research identifies six main challenge areas for the Finnish Government.

1. Overcoming the strategic foresight impact gap by integrating futures and foresight with core strategic processes, innovation and experimentation.
2. Opening-up the development of policy alternatives connected to future challenges by systematically involving citizens and other stakeholders in future-oriented policy creation.
3. Strengthening the capacity of public servants to reflect and act on future policy challenges by increasing access to and experience with anticipatory innovation approaches and tools.
4. Ensuring that traditional government policy steering mechanisms – strategic, budgetary and legal – allow for (and do not inhibit) the exploration of policy alternatives and tackling complex problems.
5. Leveraging anticipatory governance mechanisms to allow for complex and long-term policy issues to be collectively understood and sustained
   across the policy cycle.
6. Countering governmental silos and creating new ways of collaboration to look at emerging problems in a cross-government manner.

Four policy domains were identified as case studies to gain greater understanding and pilot initiatives to build Finland’s anticipatory capacity: continuous learning, carbon neutrality, child well-being and collaboration between politicians and public officials. The cases provide substantive and contextualised learnings about the effective governance of anticipatory innovation, informing on how Finland’s governance structures can deal with shifting values, new public expectations, uncertain future shocks and a variety of preferable futures that the country wants. In addition, they provide tailored and practical proposals for the enhancement of Finland’s anticipatory innovation governance capacity to address concrete policy challenges.

Continuous learning

The world of work is continuously transformed by the complex interaction of trends such as automation, climate change and an aging population. The changes they precipitate affect the demand for skills: jobs and tasks in one sector may disappear while others emerge which require new combinations of competencies. Against this backdrop, Finland has recognised the need for a reform of continuous learning to create a system that is able to anticipate and respond to changes in the demand for skills and learning across the labour market and broader society. The Continuous Learning Reform project was initiated on 25th September 2019 and is due for completion on 31st March 2023. This pilot case explored how anticipatory innovation governance could facilitate the development and implementation of the Continuous Learning Reform. The pilot case results in the identification of a ‘bipedal’ governance setup in which one ‘leg’ engages key government and non-government stakeholders in co-ordination for decision-making, while another ‘leg’ ensures that relevant anticipatory information is identified and interpreted through collaborative processes.

Carbon neutrality

Finland aims to be carbon neutral by 2035 and eventually become the world’s first fossil-fuel free welfare society. However, no governance model—even with the most successful of reforms—can deliver support to transition to carbon neutrality unless it has the ability to constantly perceive, understand, and act upon the changes of the future as they emerge. For this reason, the government of Finland sought to work with the OECD to explore in this pilot case study how anticipatory innovation governance could be applied to support the country’s transition to carbon neutrality. For Finland to develop and act on anticipatory strategies for carbon neutrality, the case highlights the need to prioritise creating responsibility and urgency to act, collaboration and coherence, capacity development, integration of green fiscal practices into the mainstream, and holistic medium-term strategic planning.

Child well-being

Finland published its first National Child Strategy in February 2021. The task is to formulate a vision for a child and family-friendly Finland that spans government terms and crosses administrative boundaries. The implementation of the Strategy is to be undertaken alongside changes occurring as part of Finland’s social and welfare (SOTE) reform, which completely re-envisages how child well-being services are governed and organised. Anticipatory innovation governance has particular relevance in this context, due to the changing nature of childhood and the sense of uncertainty and complexity inherent in policies affecting people early in their lives. This pilot case study highlights how Finland might address existing challenges while preparing to better meet the needs to future generations through implementing some of the anticipatory innovation governance mechanisms. More specifically, the analysis indicates the need to focus on the mechanisms of public interest and participation, sense-making, networks and partnerships, and tools and methods as relevant mechanisms that can help to integrate a more inclusive and long-term perspective. These enable the identification of the following options for action: child well-being missions, ecosystem building and signal exchanges.

Collaboration between politicians and public officials

To date, future-oriented policy making in Finland is conducted mainly by a ‘coalition of the willing’ and co-exists alongside traditional policy-making processes and mechanisms. An important question is how different actors within the Finnish Government can work together on anticipatory policy making and what forms of collaboration between public officials and politicians could be instrumental. The purpose of this case study was to contribute to further building Finland’s anticipatory capacity, and to the development of the anticipatory innovation governance model by assessing how politico-administrative collaboration could be integrated into the model. This work informed the following suggestions: appointing an objective facilitator for dialogues that enjoys trust from both sides, establishing a dedicated process for politicians and public officials to get to know each other at the beginning of a new term, and embedding anticipation into existing future-seeking moments, such as the development of the Government Programme.

Actions identified

Stemming from these case studies and the overall analysis, including a revision of the anticipatory innovation governance model itself, there are actions that the Finnish Government can perform to make anticipatory innovation capacity more systematic across government. These include:

• Systematise the government transition process to improve the continuity of long-term reforms and institutional memory. A knowledge repository around long-term reforms and anticipatory issues, combined with a more structured transition process including opportunities for trust-building and collective future-seeking, could enable governments to build on the successes and learn from the challenges of their predecessors.
• Develop new methods and governance approaches to plan responses to emerging issues. A cross-government committee for senior leadership to discuss emerging issues would create demand and legitimacy for the use of anticipatory approaches and improve collaboration across siloes. To function effectively, it would require an agreed methodology to diagnose and make sense of emerging policy problems and assign ownership, responsibility and resources to issues in a flexible, but transparent manner.
• Establish structures for regular collective sense-making, visioning and exploration of alternatives. As part of an anticipatory steering process, collective sense-making between different communities across government, including politicians and public officials, needs to be institutionalised to understand drivers of change and to facilitate efficient policy co-creation. This needs coordination from the centre and equally involvement of ministries owning the policy issues discussed. As well as enabling the identification of common purposes across government, collaborative processes enhance the exploration of alternatives, leading to more robust policy decisions that account for possible future changes. It is essential to build robust levels of trust between the various communities of government for this to work effectively.
• Test new approaches to allocate budgetary resources to emerging phenomena. Effective anticipatory innovation governance requires that fiscal planning and investment prioritisation approaches more systematically explore and address uncertainty. Resource allocation should encourage experimentation and cross-government working to address complex, wide ranging and unstable phenomena.
• Further enable regulatory approaches to support experimentation. To prevent legislation from being a barrier to beneficial change, it is important to allow for continuous reflection on drafted legislation and its effectiveness in enabling innovation. The Ministry of Justice should explore the possibility to institute a ‘right to challenge’ function for strategies, policies and services with resourcing to explore alternatives.
• Design training, teams and roles to increase the understanding and application of anticipatory approaches. Targeted programs for public sector leadership, civil servants, foresight and innovation experts should support the development of anticipatory innovation capacity. Redesigning the roles of leaders with a particular focus on middle managers to make space for anticipatory approaches can accelerate their application. An important element of this is establishment of a climate of psychological safety.
• Institutionalise dialogue and deliberation to build trust between citizens, public officials and politicians in order to enable greater engagement with uncertainty. Guidelines should be developed to institutionalise citizen and other stakeholder participation methods to consider policy alternatives early on and help provided to public organisations to facilitate these discussions and collective sense-making efforts. Deliberation and dialogues in which both politicians and public officials can contribute to knowledge around future developments and collectively make sense of the insights available should become a regular part of the governance process.
• Connect the futures and foresight system to policy making. Training in futures and foresight (not just in the production, but also the use of futures analysis) for experts, policy makers and senior leaders can help bridge the impact gap by improving confidence in the use of anticipatory approaches. Ministries and public organisations should be encouraged by the centre to bring strategic foresight out of “narrow circles” and involve more outside and international experts in the work which can help bring a diversity of perspectives and keep the focus on long term visions (instead of on reactive response to the crisis of the day)
• Track and assess the use of anticipatory approaches. The State Audit Office of Finland could take up a more proactive role in following up on the value chain from futures and foresight, strategic steering to innovation and experimentation and implementation.

These actions points lay out the need for significant investment in the anticipatory innovation governance system in Finland. Given that many of these recommendations are not new and the increasing pressures of an increasingly fast-paced and volatile policy environment, it is essential for Finland to start taking concrete action. This holds true for any country striving to ensure the effectiveness of their governance system, whether at the beginning or ahead in its anticipation journey. The OECD encourages governments to learn from the Finnish experience and get inspired by Finland‘s willingness to understand anticipatory innovation governance as an ongoing practice in need of continuous efforts.

The project was funded by the European Union via the Structural Reform Support Program and implemented by the OECD in cooperation with the European Commission’s Directorate General for Reform Support (DG REFORM).