Finland's Ministry of Finance has established a parliamentary working group to assess the future role of the Finnish Innovation Fund, known as Sitra.
Founded in 1967 to commemorate the fiftieth anniversary of Finnish independence, the fund was charged with "building the successful Finland of tomorrow", and especially in its early years, the independent body functioned as an important venture capital and private equity investor. But recent years have seen its activities move in a more think tank direction.
The fund now fashions itself as a "predictor of societal change, analyzer of development options, and tester and developer of operational models".
The parliamentary working group will set out to evaluate the mission, role and administration of Sitra for the first time since it was founded. Members of each of the parliamentary political parties in Finland are represented in the group, which is led by former prime minister Matti Vanhanen.
"The idea was preceded by a need for change in Sitra's administration and the necessity to discuss the 50-year-old fund's activities, purpose and resources," Vanhanen said.
Sitting atop a pile of money
Back when Sitra was first founded, the fund received 100 million Finnish markka in Bank of Finland bonds. Finland's central bank raised the fund's core capital with additional payments of 100 million markka in 1972, 1977 and 1981, bringing the total capital at Sitra's disposal to 400 million markka.
In 1992, Sitra was transferred from the Bank of Finland to the auspices of the Finnish Parliament, and shares in the Finnish mobile phone manufacturer Nokia – a world market leader at the time – detached from the state portfolio were transferred to the fund. Today, Sitra's operations are financed with the near 30-million-euro return the fund earns on approximately 840 million euros it holds in nest egg capital.
An external evaluation has also begun alongside the parliamentary working group's assessment, and both audits are forecast to be completed by the close of 2019.
"It's a good thing that an external reviewer will assess Sitra's activities - for example, from the perspective of the stakeholders – and the owner, Parliament, can consider what it wants from the fund. This way we will have the most comprehensive assessment possible at our disposal," said Mikko Kosonen, Sitra's President.
Independent fund denies political bent
Kosonen says that the independent fund has been reproached in recent years for being seen as "too green" and interfering in the debate about the so-called freedom of choice element of the planned revamp of Finland's social and health care services.
"A few years ago, labour organisations and the Social Democrats criticised the stance we took in favour of introducing more labour market flexibility," Kosonen said.
Sitra employs fewer than 200 experts and about half of its annual budget is devoted to personnel costs. During the last election cycle, the SDP proposed that the fund's capital be reduced by half.
Kosonen said that if Sitra's funding were cut, it would reduce the fund to a think tank alone.
"At the moment, we aren't just a traditional think tank, rather we are a 'think and do tank'. We've got our hands in the dirt, building society's infrastructure and running experimental projects. This takes money," he said.
Parliamentary working group chair Vanhanen said that he has heard no criticism of Sitra from his own Centre Party ranks, and said he believes that a strong capital foundation is necessary to ensure the fund's independence.
"Sitra must be a 'future house' that can independently launch projects that it considers important for Finland's future, regardless of what kind of government is leading the country," he said.
Sitra's President Kosonen said he expects the assessments to finally remove the unnecessary "political games" that have plagued the fund in recent years.
"It's good to carry out a thorough evaluation that can determine what kind of Sitra people want. I hope that once it is done, we will be able to conduct our work in peace once again."