North stars - Issue 44 - Magazine | Monocle

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In both government and industry, the Nordic states have long served as models of best practice. Despite their relatively small size, Denmark, Sweden, Finland and Norway have forged a reputation as leaders in innovation and design: adaptable, resourceful and creative. As western countries struggle with huge challenges – from climate change to shifting global competitiveness – Nordic institutions dedicated to fostering innovation are each working to ensure their nations maintain a strong position in the 21st century. This month, Monocle looks at three of the most pioneering and successful bodies: Mindlab in Denmark, Vinnova in Sweden and Sitra in Finland.

Mindlab, with its small, specialised team, concentrates exclusively on innovation in the public sector. Prompted by an increasingly demanding citizenry and the pressures of public-sector finances, it employs design practices to break down bureaucracy in the Danish government. In contrast, Vinnova has roots in research and development, maintaining a strong technology focus. It has recently broadened its remit, working to bring IT-based solutions to bear on large-scale challenges for Swedish society. Sitra, the largest and longest existing of the three units, is taking aim at Finland’s most intractable problems. Backed by considerable resources, it is deploying strategic design, investment capital and co-production to change Finnish society. While Mindlab, Vinnova and Sitra differ in their size, approach and focus, they share a common trait: reinvention. All three have evolved, overhauling their operations and redefining their objectives. In each of their successes, these organisations provide a valuable lesson for similar institutions around the world: delivering sustained innovation on a consistent basis requires you to adapt to stay as relevant as possible and meet new challenges.

Mindlab, Copenhagen

In comparison to the Spartan surroundings of most public-sector offices, stepping through the doors of Mindlab is astonishing. The effect of the physical space is, by design, inspiring – and Denmark’s government innovation unit operates every bit as well as it looks. The open plan meeting space, often the hub of activity, is designed to feel like a stage, lending it tremendous flexibility. “The entire office is built around design principles,” explains Christian Bason, Mindlab’s director. “We see creative space as crucial for driving innovative thinking.”

During a tour of the offices, Bason gets to the crux of Mindlab’s mission. “Our goal is to generate the aspiration for change in our clients. That’s how you break through bureaucracy and create innovation,” he says. Established in 2002 as part of the Ministry for Economic and Business Affairs, Mindlab was conceived to serve as a creative space for brainstorming. But by 2007, the unit had expanded to cover two additional ministries (Employment and Taxation) and evolved into an elite team of problem solvers, helping ministries work through some of their most intractable problems.

This shift in focus has seen the development of approaches associated more with anthropology than public management. “Mindlabbers”, as they label themselves, now spend much time alongside public service users and compliance teams in Danish firms, observing how citizens and businesses experience regulations, bureaucracy and government services. The insights gathered are then delivered to agencies and departments, often sparking radical changes in the way they operate.

Yet even with space to think creatively and new user-focused insights, civil servants are often reluctant to change. “Policy is inherently risky,” Bason says. But through the use of design practices, he insists, risk-induced anxieties can be relieved. “Where design is so unique and can add value is through small-scale, interactive, rapid prototyping and testing. You create a safe space where policymakers can fail fast to succeed sooner.”

Mindlab’s formula for driving innovation is brilliantly simple: speak to people on the ground to gain inside knowledge and apply design principles to solve problems. But perfecting this approach isn’t always straightforward – it’s easy to get caught up in bureaucracy. This summer, Bason will unveil blueprints for Mindlab’s third incarnation, when it will address more long-term challenges. Change is never easy, but as he explains, the life expectancy of innovation units is about four years. “The key to longevity,” he reflects, “is having the self-awareness to ask yourself a difficult question: ‘Are we still relevant?’ If not, you must take your own medicine.”

Sitra, Finland

“We believe Finland is on the cusp of the biggest transformation in decades,” says Mikko Kosonen, president of Sitra. The implications, he explains, require systemic changes in Finnish policy with regards to the economy, society and management of the wider public sector. These problems are similar to those faced by many of the world’s developed economies: climate change, ageing populations, shabby public finances and unsustainable development. For Sitra, Finland’s innovation unit, these challenges provide an opportunity to improve society and the way it runs. “Sitra is a very interesting social innovation,” says Kosonen. “We were established as a gift to the Finnish people, marking the 50th anniversary of Finland’s independence.” That gift, given by the Bank of Finland in 1967, was an endowment of 100m Finnish marks (now €700m). Sitra was created as an independent body to manage that endowment, focusing first on building Finland’s global competitiveness by financing industrial research and development.

In the early 1980s, Sitra reinvented itself to become Finland’s first venture capitalist, with the aim of helping Finnish industry monetise its technological gains. As globalisation gathered pace – and Finland’s economy expanded – Sitra became a relatively small player in the country’s venture capital market, instigating another rethink in the early 2000s. The result was Sitra’s third, most ambitious, incarnation. “We asked ourselves ‘How can we improve the impact we’re making on society?’” says Kosonen. The answer was the adoption of three objectives: redefining the meaning of well-being, promoting a service economy and supporting sustainable development.

Meeting these objectives has required two radical changes, firstly moving towards co-production, working alongside stakeholders, citizens and the public sector. “Historically, our people didn’t necessarily like to go into the field and work with stakeholders,” says Kosonen. But this is changing. “We need change-makers; we need staff who can engage with people on the frontline.” This is now taking shape. Working with local government, healthcare providers and urban planners, Sitra staff are designing service-delivery models and pilot schemes reshaping urban development.

Central to Sitra’s latest incarnation is the introduction of an in-house design team. “What makes strategic design so valuable is the way it allows us to handle problems,” says Bryan Boyer, a member of Sitra’s growing design team. Emphasising the need to work through complex issues in stages – testing and adjusting solutions – the team is using design thinking (locating problems and then providing solutions) in all its work. “It’s a transition from design as giving shape to objects, to design as helping shape better decision making,” says Boyer of the shift. This approach is having a significant effect on Sitra’s work, and design thinking is becoming the unit’s hallmark. Most notable is a low carbon urban development project in the former Jätkäsaari harbour area of Helsinki – Low2No – that will become Sitra’s new low carbon headquarters. Sitra’s own transformation is symbolic of the challenges facing Finland, a recognition that the existing socio-economic model is reaching the end of its useful life. By deploying his organisation’s considerable resources, Kosonen hopes to accelerate the innovation process required to get Finland through this transitional period. If Sitra is successful, Finland could well be the model for the 21st century.

Vinnova, Sweden

The Swedish innovation agency, Vinnova, has started a new chapter, redefining its strategy in 2011. From funding specific areas of technology, the organisation has moved into challenge-driven innovation, focusing on four areas: sustainable cities, health and healthcare, information society, and competitive industry.

Charlotte Brogren, the agency’s director general, sees this new path as a way of sharpening Sweden’s competitive edge. “A lot of people are talking about challenge-driven innovation now. But we’re among the first to start implementing it,” she says. “Take IT: it’s important to continue developing IT. But I believe we stand to gain even more by getting IT know-how inside healthcare, the process industry, public administration and services. That’s where we get the big societal effects from having developed the basic tools.”

The timing of Vinnova’s rethink is no coincidence. Brogren talks about globalisation and toughening competition, and the need to develop competitiveness. An important tool is getting researchers and developers to initiate unusual cooperations. “We will need to work more between social sciences, human sciences and technology,” she says. “The higher up we get in the value chain, the more we rely on human behaviour. A technology gadget, for instance, will not become a hit if there’s no real need for it. And we’re not just talking about gadgets; it’s as much about ways to reach people, to get in contact with new markets, come up with new ways of getting paid.”Vinnova was founded in 2001 to help increase the competitiveness of Swedish researchers and firms.

The agency has €220m to invest each year. It generally requires co-financing of its projects, so the investments are in effect doubled. The organisation has been successful at identifying projects with future potential: recent investments include a solar-powered heating pump and an eye-controlled computer system, used to give disabled people access to computers or analyse the way people look at adverts. As a small country, however, Sweden constantly needs to find new ways of maintaining its position. “We should be proud of where we are,” Brogren concludes, “but as everyone continues to develop, we do too. The recipe for Sweden’s success is not the same tomorrow as it was yesterday.”

Sitra: five projects

  1. In constructing its new HQ, Sitra is redefining sustainable urban development. The Low2No project blazes a trail for carbon-neutral building.
  2. Sitra’s response to looking after Finland’s ageing population is a pilot project with an elderly care home in Tampere, which brings together public, private and third-sector providers.
  3. Sitra runs executive-development courses, assembles Finland’s top 200 decision makers to discuss national challenges, and holds “studios” to generate solutions.
  4. Working alongside Finland’s 342 municipalities, Sitra has developed a single ICT platform, ending highly expensive duplication.
  5. In 2009, Sitra began piloting “health kiosks” to offer low-threshold primary healthcare services in accessible places such as shopping malls.

Vinnova: five projects

  1. Traffic safety research. Swedish research and development has led to many successful products and services, saving lives.
  2. The Maxfas material. This new material conducts electricity and can replace gold in the manufacturing of electronic components.
  3. ClimateWell. An internationally successful solar-powered heating-pump system.
  4. The Peepoo bag. A single-use personal toilet that is self-sanitising and biodegradable. First launch project is currently underway in Kibera, Kenya.
  5. Eye-controlled computer monitor systems developed by a firm called Tobii. Developed for disabled people, it can also be used to analyse the way people look at adverts or websites.

Mindlab: five projects

  1. Mindlab helped show Denmark’s National Board of Industrial Injuries that its processes made people feel worse, not better. Services were thus redesigned around the feedback provided by industrial-injury victims.
  2. Why don’t young, tech-savvy Danes do their taxes online? Mindlab discovered the Ministry of Taxation’s website confused young users, so it designed a simplified version.
  3. Denmark’s regional business incubators spur growth by providing guidance. Mindlab helped one underperforming incubator to redesign its engagement with clients. Satisfaction soared, and the new model has since been adopted nationally.
  4. Denmark needs skilled foreign professionals, but retaining expats isn’t easy. Mindlab helped develop the first social network for them, helping them settle.
  5. Mindlab’s “Regulation Hunters” try to identify irritating burdens faced by companies. The aim is to reduce red tape, giving firms more time to run their businesses.

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