In Finland, the government is applying a holistic view on finding new innovative solutions to public welfare challenges. In Finland, SITRA is a publicly-owned venture fund. Today, the venture activity is contracted out to private venture companies, while SITRA works with areas which make Finland more innovative and competitive. One of SITRA’s activities is systemic innovation. One challenge is to identify the barriers for applying “smart government” in the public sector.

Due to systemic interdependencies and complementarities, societies that are able to renew their various subsystems rapidly and coherently will reach increasing returns and high productivity growth associated with the new technologies, organizational solutions and institutional arrangements.

Finland has embraced the systemic innovation challenge with its new comprehensive innovation strategy. SITRA, the Finnish Innovation Fund was an active participant in the strategy development process. Its activities are guided by a vision of Finland as the global forerunner of well-being enhancing systemic innovations. SITRA facilitates systemic innovations in the Finnish society by developing foresight and insight about the required changes and by facilitating them through practical programs, strategy processes and new business development. SITRA’s activities bring together all relevant private, public and third sector stakeholders in a particular area.

Systemic changes involve various market failures, which may call for government intervention. However, systemic interventions require “smart government”, which carefully considers the various private, public and third sector solutions to a particular problem before choosing what to do, if anything.

Source: SITRA (2009)