Circular Economy Part II: A funding model from Finland – and for Hong Kong?

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Tapio Anttila, Executive Vice President of Finland’s state-founded future fund Sitra.

Harbour Times reporter Elise Mak travelled to Finland to explore how the county is adopting the concept of a circular economy and the lessons it holds for Hong Kong

HELSINKI. The Hong Kong government is bent on focusing on technology to ensure a better future and boost the city’s competitiveness. The Achilles heel of these efforts might be funding that gives rise to independent, long-term thinking and effective projects.

On this front, there might be lessons to be found in Finland and its push to create a fund to develop circular economy technologies and key projects with very limited timeframes.


Finland’s forward-looking vision for a circular economy was created by Sitra, the country’s future fund that promotes future-oriented initiatives. To avoid political influence, Sitra is self-funded and focuses on providing long-term financing for projects.

In an exclusive interview with Harbour Times, Mr Tapio Anttila, executive vice president of Sitra, discussed Sitra’s unique model to guarantee continuity and independence to execute the country’s forward-looking development plan.

“Sitra is more than a think tank. It is a think-do-connect tank. We now aim for a systemic change in society,” says Mr Anttila.

Having all stakeholders onboard, he believes Sitra represents the joint efforts by the entire country.

Independence is key

Finland first put plans in place to secure a better future for its people half a century ago through a financially and politically independent fund.

In 1967, Sitra was established by the Finnish Parliament as a gift to celebrate the 50thanniversary of the country’s independence. The Bank of Finland granted 16.8 million euros to Sitra as endowment capital to generate future profits to finance future-oriented projects.

With additional grants over the years, the endowment capital has grown.

With this money, Sitra invests in a diverse portfolio: shares of Nokia, unit-linked insurance, real estate private equity funds and so forth.   

Today, Sitra’s operations are funded by returns that average around EUR30 million every year from its endowment capital investments. At the end of 2018, the market value of Sitra’s endowment capital amounted to ERU776 million euros.  

“We are a professional investor and we do risk analysis,” Mr Anttila explains.

While the return from Sitra’s endowment fluctuates – 7.7 percent in 2017 and -3.9 percent in 2018, Mr Anttila says Sitra allocates around 4 percent of the returns every year to fund its operations.

“Sitra’s role as an independent party, not funded by the central government or businesses, was extremely significant as it allowed the participants in the process to feel that the starting points were impartial and fair,” is how the fund describes itself.

Sitra reports directly to the Finnish Parliament rather than the government that changes every few years.

Even though its supervisory board is made up of parliament members and its Board of Directors includes three ministries, Sitra has remained politically neutral and focused on providing solutions to meet the goals.

“The supervisory board is formed by MPs from all political parties,” says Mr Anttila, dismissing the possibility that Sitra might lean to a certain political spectrum as governments change.

He stresses that the future fund has a well-balanced representation.

“We identify an issue, then carry out experiments and research and invite open discussions. We provide fact-based solutions rather than opinion,” he explains of Sitra’s work.

He believes Sitra’s quality work can convince the decision makers and the public, so the organisation can be exempt from drastic changes demanded and made by them.

“You need a good name to gain people’s trust when you want to push things ahead,” Mr Anttila explains.

Learn to exit

Sitra’s role has also evolved over the years to ensure it stays influential.

During its first two decades, Sitra funded R&D projects. In 1983, the Finnish government established the Finnish Funding Agency for Technology and Innovation, now known as Business Finland, to provide funding for startups.

“Sitra funded many research projects that led to fruitful results in the early days. But to scale up these projects, it’s not our task anymore,” says Mr Anttila. “Business Finland is the accelerator to make these projects happen faster.”

To keep its financial position solid, Sitra handed over the task of funding research and startups to Business Finland. From the 1980s to 2000s, Sitra focused on venture capital investments in Finland to keep the money growing.

Another important measure by Sitra is giving its activities a limited timespan.

“The most important phase of our projects’ life cycle is the exit. You need to know when to leave,” says Mr Anttila. “When we start to plan activities, we always ask ourselves when is our exit. There’s no point to do anything without this idea of who will take over next. There’s no area that we can stay for good.”

One of the “exits” Sitra uses is the Smart & Clean Foundation, which is given five years to work on climate and circular solutions in the Finnish capital Helsinki after being a project funded by Sitra. The foundation started its work in 2016. During its five years of operations, the foundation will work towards its goals using the funds raised from multiple participants that include businesses, cities, research institutes and the Finnish government.

Samuli Laita, communication specialists at Sitra, says the limited timespan strategy works well.

“Knowing that there’s only five years’ time and you’ll need to go, you’ll work extra hard to make things happen,” he explains.

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