LFC Lecture with Jyrki Katainen

Paavali Koivula: Good afternoon everyone and welcome to the first LFC Lecture of 2021. My name is Paavali Koivula and I will be chairing the event. Today we have the honor of welcoming Mr. Jyrki Katainen, president of Sitra, to discuss the mega trends of the future as part of the Leadership for Change Lectures that bring together skillful leaders with experience in dealing with change. Today's societal challenges are complex and change processes require joint efforts of different sectors of society which reflects the wide variety of the LFC lecturers. The lectures are offered by the master's degree programme in Leadership for change. Mr. Katainen is an alumnus of Tampere University and currently the president of the Finnish Innovation fund and think tank Sitra. Between 2014 to 2019 Mr Katainen served as the European commission Vice President for jobs, growth, investments and competitiveness, prior to which he was the Prime Minister of Finland. His impressive career puts him in a unique position to reflect on megatrends that will shape our lives in the future and we are grateful for having him here with us today. After his lecture, there will be an interview session hosted by the organizing team and the audience is encouraged to submit questions after Mr. Katainen's presentation. Selected audience questions will be asked towards the end of the event. You can either write your questions to the chats and our interviewer will present the questions, or you can use Zoom's raise hand feature if you want to speak out your question. Please be reminded that the event will be recorded by our team. Now the floor is yours, Mr. Katainen.

Jyrki Katainen: Thank you very much. It's a pleasure to have the chance to participate in this event. And as was mentioned I am a proud alumni of Tampere University. So this is a reason to be very ... to have a chance to discuss with students and whoever will participate in this event. I'd like to start by introducing Sitra first, because I know that many people may know Sitra or at least you have some sort of understanding what Sitra is doing but not necessarily all. So Sitra is the future house of Finland. Which means that we are a think tank. Our basic aim and duty is to promote systemic changes in carefully selected areas. And in order to make it possible to do systemic change we need different tools. And the first one of those tools is our think role. So Sitra functions as a classic think tank, but we're not only a think tank. We do also experimentations and pilot projects together with companies, public authorities and civil society. Finally, we develop and promote change-making capacity, or ability, or capability to make change. And this is what connect ... means. We organize events and education for change makers. In order to share the view of the future and make it possible to make change in different areas. I'll give you a short example of our current projects which has already had a positive in terms of enabling, make change and make systemic change. Sitra brought circular economy concept to Finland some 6-7 years ago. We were the organization which helped then the Finnish government to adopt the first ever made circular economy roadmap, national circular economy roadmap. It was the first in the globe. And since that we have carried out a significant amount of concrete experimentations and pilot projects together with the private sector and public authorities to promote circular economy. Now circular economy has quite well rooted to our society. And we are looking at new areas to concentrate on. So, Sitra always do exit once some experimentations or the systemic change proves to be ready to fly by its own wings. Sitra is active mostly in Finland but also abroad. We are close partner to the European Commission in the various fields. For instance, in regulatory side we advice and commission on singe market project, how to make circular economy-friendly business regulation better, et cetera. We have some 160 employees, and our annual budget varies between 28 to 30 million. euros. Our financing comes from returns of our endowment capital, which was given by the Parliament of Finland in 1967. When Sitra was founded. We are not a research center, neither we do peer-reviewed basic research as universities are doing. Our thing is to do and connect tank, we have a special role in knowledge- making. 70% of our annual resources has gone to the experimentations and pilot projects. 16% to connecting people. And 11% to classic think tank job. This allocation of resources also explains that we don't want to be in the fields of basic research. Instead we do what classic think tanks do, plus we do experimentations and pilot projects.

But let's turn now to the mega trends of our future. If you could put the first slide on. Or the second, actually. Excuse me, just a second. OK, let's continue. This picture illustrates mega trends, which were published a year ago. Sitra, one of the Sitra's duties is to do foresight job. And mega trend report is one of our key product. We publish megatrends every second year. And this was done last year. Mega trends can be seen as a driving force of change or forces of change which can, which happens or which we can realise quite quite obviously. They will have some impact on our future but they are not self fulfilling prophecies. But it's quite obvious that these driving forces will have some impact to our societies and lives. One can use them for whatever the purposes because they are dynamic driving forces. Or then one can influence them or then just ignore them. We can also push them to a certain direction. Or adapt to them. They can be problems or opportunities, depending on how do we see them or whether we want to use them or whether we want to push them to certain direction. And they help us to identify potential tensions in our society. When looking at this picture, the mega trends are those, which are written in bold text, and dots are illustrating potential tensions, which may arise if these trends are ignored or we are not using them sustainably. I will touch upon on some of these megatrends, but I won't present them all in order to keep my presentation concise, but we can of course discuss also the rest of them in the discussion session.

I will start from the middle - ecological reconstruction is a matter of urgent. This may sound like a no-brainer. It's clear we all know that climate change has already affected our society and we have scientifially proven research what will happen to the globe unless we manage to do something to address climate change. Also the biodiversity loss is a reality. It's less talked and less popular matter than climate change, but it's becoming as burning issue in people's minds as the climate change is currently. Because if looking at the whole world there is approximately 1 million species and organisms that are under threat. In Finland, close to 12% of all known species and organisms are under a threat. At least to me and to many other people, we have been taught at school that in nature every organism and species have some special function. And nobody knows where goes the threshold where the loss of nature or species will destroy the ecosystem. Which causes serious trouble also to human life. The main reason for nature loss, biodiversity loss is the exploitation and processing of natural resources. So it means that we need a systemic change, which I'm going to talk about more later, when talking about the economy. It's not enough to set up or found only new conservation areas. They are very important and we need probably them more, but it's not enough. So we should be more worried about the potential break-even when for instance nature stops cleaning water or soil doesn't absorb water, and there are increasing amount of floods. Or pollination doesn't function naturally and it must be replaced by technology and we have to do it mechanically. Or where goes the line when the loss of some species will have significant problems to humans health. So, this ecological construction will be one of the driving forces in our future and it's also a matter of tension and clashes between different groups of people and different regions and countries unless we manage to take a sustainable, sustainable and systemic changes. Whether we like it or not, this matter is one influencer already today, but especially in the future. This gives me a chance to jump to the second mega trend which is "the economy is seeking direction".

Before COVID-19 crisis, there have been, there was a growing discussion in the world about the role of capitalism. We were talking about the critics of capitalism. But nowadays we don't talk about that that much, because of other crises have taken over. And I think t's good especially in Nordic countries. I understand where this debate started from. It started mostly from from anglosaxon cultures, where the welfare society is not on the same level as it in the Nordic countries. Inequality was a rising matter and actually it was mentioned as one of the most biggest risks in the world economy by the World Economic Forum a few years back. So it is still present and it is relevant point. We should add sustainability to the whole picture, so that we could make informed choices if we want to change capitalism or the market economy. Around this topic there has been for years discussion on the role of economic growth. From thinkers and people who are representing degrowth type of thinking, that we should adapt our societies to the situation, where economy is not growing or it should be significantly more modest than what we are envisaging. But I must say that I don't share this view. We have already now tsevera examples of the years, when the economy hasn't been growing and it hasn't led to any good. Also when looking at our challenges, for instance, environmental challenges or climate change clhallenges, we need growing economy, which finances all these transitions. I would concentrate more on decoupling economic growth and CO2 emissions and or consumption of natural resources rather than limiting the growth or envisaging zero growth or negative growth. How to do this decoupling is a million euro question. Unless we manage to do it, there are only bad options. First, we get crushed to the wall because of the natural disaster. Or then we have to accept significantly lower standard of living and social misery. I happen to believe that this decoupling is doable if you understand to do the right things. We need a system change and for me circular economy represents a promising avenue. It's not a solution alone, but it shows that we can do systemic changes within a market economy. And let it do corrective work and turn normal market economy, which is linear market economy, towards circularity, which is much more sustainable. Only 9% of all materials exploited ends up to reuse or recycle. Which means that it's a waste of money. And from economic point of view, it's a huge opportunity. Because exploitation of natural resources is not economically free. It costs lots of money. So it is supposed to be easier and cheaper to use materials which already exist in our economy. It's only a matter of market regulation. In other terms, 90% of materials are currently single used. In my mind, the answer when we talked about this decoupling, is a better regulated market economy. Market economy doesn't have values, it only has features, which have proven to be very, very effective. Market economy, which has been developed in the spirit of a linear model, take, make, use and dispose type of thinking, has proven to be very effective. Why it has functioned in this linear model. it's because we, or decision-makers, have decided to use this kind of model. Not intentionally necessarily. But this is how the market has been regulated for decades. So, one could say that market economy is hardworking assistant and we must give it a new task. To become more sustainable, to produce more sustainable products and and business models based on circular economy thinking. I became convinced of this kind of thinking when I still was in the European Commission. In the Commission I was responsible of circular economy policy. When I came to the Commission, circular economy was just a minor policy area. And it was seen only from the environmental perspective. But during the last five years Juncker Commission changed the way to look at circular economy, and it became a part of a single market policy and trade policy. So we thought that there is circular economy only if there is profit-making economy and we have to help economy to change, to become circular. So we needed to concentrate more on market regulation. And it's quite encouraging job, because in front of my office there is always, every single day, there was always a line of business people and industrial people, and civil society people, who wanted to discuss with me on better way to regulate the market. To make circular economy business models more profitable and capable to compete with with this current linear model. I believe in this kind of thinking. The main thing is to understand that market economy is effective tool but it must be guided and it must be given values, which we represent. The biodiversity loss has not been connected to circular economy as, for instance, CO2 emission reduction policies have. I believe that same type of thinking could be incorporated to address biodiversity loss. Because the main reason, which I mentioned earlier for biodiversity loss is the explotation of raw materials and processing of raw materials. So why not to use the market forces or market power to address this problem. I will give you one simple example of this kind of thinking. Sitra has been cooperating with Baltic Sea Action Group and some other public authorities. In the project, which name is Carbon action. In this project, we invited 120 farmers to look at new farming methods. They change, change slightly the traditional farming method. For instance, they turned over the land, or the soil, less than they used to. And this let to the situation where the soil, the number of species and organisms in the soil, increased significantly. So the biodiversity of the soil became better. As a result of this, grassroots got thicker and longer, and once grassroots got thicker and longer, they absorb more carbon. So we were talking about carbon farming. The soil would be absorbing more carbon. And as a by-product, farmest could better harvest. So, everybody won, basically. By doing changes, systemic changes, even though minor changes, to the way economy, in this case farming functions, we got two positive outcomes. First of all, the soil absorpted more carbon, it became better at carbon ... And on the other hand, those who did the work, farmers, got a better harvest. This, as I said, this is a very simple example. It encourages us to look at what else we could do in order to change the way the economy functions.

Now I'd like to say a couple of words on the second mega trend 'Relational power is strengthening' and 'Technology is becoming embedded in everything'. I will be short with these two topics. Because then we could move forward and continue discussions, depending on what you want to discuss about. So relational power could also be called as power of networks. It means that it's not only the parliament or the government or employers' organizations and employee's organizations who uses power today. The use of power has democratized much more than what was the case a few years back. For instance, the role of social media has become very decisive and very influential when using power. And social media has enabled to give voice for those who didn't have public voice before. It has also had a lots of negative impacts, because the voice or freedom of speech can be used in many different ways. I don't mean to say that social media is at the core of all these but it just illustrates some physically proven change, which has a significant impact to the way democracies function. Also the role of public institutions has changed. They are challenged much more often, even existence of public institutions has become questioned. And for instance, targeting journalists or targeting government officials or judges is one sign of this questioning of public institutions. So the truth has become relative. There is no any more commonly shared understanding what is true and what is not. One could say that this is positive, you can always question what is true. But it obviously has negative impacts if everything is relative. For instance, human rights. Is it like a fundamental value or is it also relative? Artificial intelligence and use of data brings additional new angles to the future of democracy. Also big companies are using significantly power. Especially those companies, which are at the knot position of different information streams. There are also companies which are crucial for freedom of speech. Or which are providing connections. So if this big company has vested interests, either political or or other vested interests, they might become to the position, where they can bypass democratically elected representatives. Also disinformation or meddling to the democratic processes has become easier. One can jeopardize the stability of a given country without shooting a shot, without ... the powder. One could say that some possible and classic virtues of democracy have become a source of instability and security threat. So the question is, what is the future of democracy like. How to increase participation, how to keep people on board in the time when it's supposed to be easier, but also in the time when for instance, public discourse has become more aggressive. Liberal democracy as we have known it is based on rule of law written rules and laws, but also to number of unwritten agreements or rules. What happens, if these unwritten rules and agreements between the citizens are not respected. That's a big question. Because liberal democracy doesn't want to cover every single corner of human life by law. It's based on belief that people respect each other, there are fundamental value basis like respect of human rights, which are partially protected by law, but mostly run or exercised by the free will of people. What happens if we lose this kind of commonly agreed ground of unwritten rules? Actually, this has already happened, partially in some countries more than in the others. But this will be a big question of the future. Finally, a few words about this technology is embedding, is becoming embedded in everything. I just raise a few keywords, which may raise your interest and we can talk later more about this. In my mind, the two main drivers of economic growth and economic development and societal changes are circular economy, everything I described earlier about this ... economy. And the second is the rise of data-based economy. What I mean by data-based economy is that as we all know, we are producing a huge amount of data every single day as customers of various applications. And there is a huge amount of public data, but also a huge amount of private day available. And the question is what are the rules, according to which private sector plus public authorities can utilize our data and use our data and use if for developing better services. Currently, we have, if simplifying the matter, two different ways to deal with data. The first one is the model of China. Chinese model, where the government owns both public and private data and uses it for its own purposes. And the second one is the one to which we all have adapted. It has been created by some technology giants, who forerunners of technological development and they have created these rules to be suitable for their own business model. I don't mean to say that that they have created rules in bad faith. Not at all. They have created rules because they can do so. And they have developed their own business models and part of their business models is certain type of behavior and rule to use date. So in other words, there's no margin anywhere in the world where data would have been democratically regulated. And in other terms, we don't have ethically sound, democratically decided market regulation on data. Data is raw material. Nothing more. Data is just like whatever raw materials, like minerals or biomass or whatever. And when looking at data from this perspective it is self clear that we need ethically sound way to use data, in other terms, market regulation. This is a big issue of our time, how to do it. Luckily, European Union has started this process. So, there are lots of opportunities in this data economy. For instance, I'm pretty sure that within next few years we will have a lot better much better public services because of data. We will have much easier living in many terms, because data is allowing us to get better services. It may be a big positive driver of more sustainable economy when the data optimizes the use of material and the product. It may also have a positive element in the life between countryside and cities. But before we get there, we need a good basis of using data, a regulatory basis for using data. We could then jump to the next slide. Quickly. Okay we can bypass this. The only thing I want to say that the coronavirus thing and the crisis may fasten certain developments and I hope so. For instance, we can stimulate the economy if we do it right. We can make a leap on making economy more sustainable. So there's no point to stimulate the old economy, but there are lots of points to stimulate new or sustainable economy. Ok, let's go further.

In addition to mega trends, there are also meta trends, which illustrates the behavior. So it has become clear that we have turned to post-normal times, which means that surprises and uncertainties are present every single day. So the question arises how to make our societies more resilient whatever we face in the future. The second meta trend is interdependence. So even if someone wanted to build a wall around the country, it is not possible anymore, because we are so interdependent in every single area of our life. And third, is complexity gap. If looking at for instance local politicians, the agenda of their work has changed entirely. They are dealing only with wicked problems, I'd say. Which means that there is not simple answers. Instead, there are solutions, which are which are not perfect. And the statement ship of today is capability to make unperfect decisions. Because there are no perfect decisions available. So I could stop here. There may be a couple of other slides, but we can we can jump over them. And I'm ready to discuss with you and answer to your questions if I just can. Thank you very much.

Paavali Koivula: Thank you very much Jyrki for the excellent and insightful lecture. Now it's time to move on to the questions we have prepared for you. We will begin with a few questions of our own and then move on to the audience questions. The audience can now ask questions in the chat section. Questions will be asked by three of our team members and fellow students Aleksi, Mika and Mari. Aleksi, please go ahead.

Aleksi Alanko: Thank you Paavali, and thank you Mr. Katainen for an insightful lecture. Even though you didn't address the topic of COVID-19 too extensively in your lecture, we would like to begin with a question related to that. It goes: how has covid-19 influenced businesses' attitudes towards sustainability in their short-term activities and long-term strategies in Finland?

Jyrki Katainen: My impression is that this COVID-19 crisis has had a deep-going impact to private sector's soul. This is just minor remark, but even the amount of questions to Sitra to provide forsight information has increased significantly. Many private-sector players or companies have contacted us and asked if we could help them to understand the future. So if COVID-19 has anything positive, I believe it comes from a rising awareness of that it's better to try to understand what are the changing forces or the mega trends of the future in order to be more capable to adapt to the surprises. So this is a general remark. Then I have seen some encouraging examples and trends. COVID-19, everybody knows it's a living organism. So it has shown that biology can cause significant systemic harm unless we take care of it. Even though biodiversity has nothing to do with this as such, but it, COVID-19, just illustrates that something of similar magnitude could happen if biodiversity loss goes too far. And maybe I'm overly optimistic, I sincerely think that this is being a good disruption in a sense that sustainability has got an extra layer of credibility. And it will have a positive impact to the way the market and companies are functioning.

Aleksi Alanko: Thank you for your extensive answer. Now my peer Mika will follow with the question.

Mika Langel: Thank you Aleksi and good afternoon everyone. I am Mika Langel, student of the Governance track here at the LFC master degree program. And thank you, first and foremost, to Jyrki Katainen for taking some time to be here with us today. You discussed a little bit on the use of data by companies. In that regard I would like to ask the following question. Sitra has a program called 'Fair data economy', which started in 2018 and has emphasis on fair and transparent use of data collected by businesses, while at the same time creating competitive advantage. Can you elaborate on this program and what business successes there have been during this period. Thank you very much.

Jyrki Katainen: Yes, indeed. This programme has been quite a success already now, and we will continue with it. So the basic idea has been to create open and transparent rules. To create a playbook for companies who are thinking of using data. And want to use it so that it's ethically sustainable. First of all, we have created a playbook for companies and we already now know that there is a big number of companies who have studied it and they try to lead accordingly. We have also had a special training program for SMEs, small and medium size enterprises, on the fair use of data. We have consulted these SMEs. And help them to change their business models. Which means that they use more available data, but so that the algorithms and the user data is transparent and and the use of clients' data is based on consent. So that they are not stealing or using some random data, which they managed to collect but they collect data in purpose, openly, transparently, and get it from the clients or other people, which allows them to use the data. So this is the first phase of our program. Nowadays, we are also part of the European Commission programmes on creating fair market regulation for using data. For instance, Sitra is coordinating 27 member states joint action on health and welfare data, meaning that we try to device rules according to which private and public actors could share data across borders. So if putting it to market terms, we try to create a single market for health data.

Mika Langel: Thank you for your answer. I think that you really touched upon the important points. And also Sitra is a great example of the path that we should continue on when dealing with this issue nationally, and of course on multilateral faces. And speaking of multilateralism, Aleksi has an interesting question on that. Go ahead, Aleksi.

Aleksi Alanko: Thank you Mika. Next we could touch little bit the EU's future role and how do you perceive it. It goes: The EU is currently challenged on several fronts. The COVID-19 pandemic, rule of law, development inside the union, decline of multilateralism, increasing misinformation and increasing tensions in the international affairs. How do you see the role of the EU in the future, in the post-pandemic world?

Jyrki Katainen: I could start from the rule of law point of view. I think our internal rule of law issues are the biggest threat to the EU. Or the unity of the European Union. Because we can disagree on many things, and the EU has become a master of compromise-making. It's part of our nature, part of our DNA. But what we cannot stand or the issue in which we can find a compromise are the fundamental rights, the fundamental values. And the rule of law is one fundamental value. It is mentioned in the treaties. Unless we have fundamental values which are exercised or used in a similar manner in all the member states, then we don't have a common basis. I'm deeply worried about this development, especially in Hungary and Poland. We just have to sort out it this problem. We have to put some more pressure on the two countries. And I'm very satisfied that the EU decision-makers managed to create a rule of law mechanism, which gives more tools to decision- makers to take care of this kind of challenges. But then when looking at multilateralism, once Donald Trump became president of the United States, it was a cold shower on the all or over the all multilaterists. But it had a by-product. His behavior woke up all those who had been silently in favor of multilateral cooperation. We saw this happening for instance in trade area. I was at that time in the European commission and I was coordinating EU's trade policy. It was fascinating to see many countries or trading looks with whom we had negotiated for ages on trade agreements, contacted us and said that let's speed up the process, we need something which helps to promote multilateralism because the world is getting crazy. So, for instance, prime minister Abe from Japan stopped by Brussels when coming back from Mar-a-Lago, Florida, and said that let's finalize our trade deal. And it happened six months after his visit. Also Mercosur, meaning Argentina, Brazil, Paraguay and Uruguay, we had negotiated with this trading block for many years, and we managed to finalize the deal. Also Canada and Mexico. So there is a strong demand for multilateral. And Trump didn't represent this but the rest of the world did. So I believe that this is a growing trend now, especially as Biden has taken over, and I believe that he will restart this development again. But certainly there are challenges. I would raise a couple of challenges to the EU. The first one is technological development, because it changes trade and market. For instance, if we are looking at 5G technologies or some other critical technologies. China is one of the challengers for us because they don't always play by the book or play by the same rules as the rest of the world. Let's put it this way: they don't play by the rules of other democratically driven countries. They are either subsidizing their business and this distorts the market or then they are subsidizing the business because of because of security interests in their minds. And trade and commercial activities have become more complex than before. So we must be careful when promoting free, rules-based, ethically-driven trade, we cannot be blue-eyed in a sense that we accept everything.

Aleksi Alanko: Thank you very much. A very broad answer to all of that parts of the question. Now Mika will continue.

Mika Langel: Thank you Aleksi. And one last question on my behalf. This time on a domestic level. Finland is currently experiencing an unprecedented level of public debt because of the coronavirus crisis. As a result of the debt to GDP ratio will grow during the 2020s. Coupled with the increasing pressure from an aging population, what measures do you think Finland must take to tackle its public finances in a sustainable way and ensure the health of the welfare system? Thank you.

Jyrki Katainen: That's a very good and important question. I must admit that I'm worried about the development. Because, let's put it this way, I understand well that during the time of economic downturn, for instance now because of COVID-19 we have to stimulate the economy in order to soften the full impact. I think that the amount of public stimulus is not all necessary for stimulating the economy. There seems to be an idea that now is good excuse to finance everything. And criticism is milder because because we can always say that this will stimulate the economy. This is my honest observation. We are increasing the public debt unnecessarily much. We could do stimulus without increasing permanent expenditures. So stimulus is supposed to be temporary in nature. But all the stimulus, investments or money used for stimulus, which is permanent in nature one can question. This is the first observation. The second one is that of course we have to pay the debt back. Always we have to pay the debt back. So, what is needed? The first one is, and this is the most important, we need better growth prospects than what we can expect nowadays. Basically, I hope that politicians could concentrate on real, fact-based, evidence-based instruments to to create better incentives for growth. It is supposed to be not too ideological. I think all the political parties are in favor of sustainable economic growth. And now it's only a matter of choosing the tools. So we need growth. Otherwise we can not pay the debt back and run a welfare society.Second, I can not exclude significant savings in the future. I wouldn't raise taxes that much the tax rate, because it is very high in Finland already. But in years to come, I believe that there is a need to do some budgetary cuttings and savings. I cannot give you any example of the magnitude. I find this quite obvious. And finally, and this is a positive challenge, we should look at how we could make our public services more effective, increase the access to public services and increase the productivity. And here a data economy can play a crucial role. So we just have to understand how the use of data could make services more cost-effective and productive.

Mika Langel: Alright. Thank you for your comprehensive answer. I think it really reflects the need to find a compromise between the long-term and short-term in public finances. Having now covered some questions from the organizing team, I would like to give the floor to Mari and she will take the audience questions. So, Mari, please.

Mari Issakainen: Thank you Mika. Now it's time for our audience's voices. My name is Mari Issakainen and I will be moderating the questions. As a reminder, you can either write your questions in the chat as many of you have already done, or you can raise your hand with the Zoom feature and then you can ask the question by yourself, when I give the permit. Let's start with a question from the chat. “Hello Mr. Katainen. You said that regulating the economy is part of the systemic change needed to decouple economic growth and CO2 emissions. Can you expand a bit on what kind of regulations does this entail?”

Jyrki Katainen: Yes, actually… Probably I should be more precise. The market has been regulated already now but the current market regulation by large encourages linear economy. I'll give you an example of what we have done in order to boost circular economy. One concrete example is the new waste legislation, the European waste legislation, which says that by 2030 only 5% of municipal waste can end up to a landfill. So basically there is a landfilling ban on waste which goes below 5% of municipal waste. What does it mean in practice? It means that municipalities and public authorities must devise, and of course private sector, must devise other use for this waste. Hopefully it doesn't go to incineration more than necessary. I hope that different waste streams are separately collected and it will create a basis for secondary use of the same raw material. In the same legislation package there is by the way a proposal or it is not a proposal, this law has been adopted. It says that there is a number of different waste streams which must be collected separately. And this is another example what can be done. So what I try to say is that if we want to promote, for instance, circular economy or more sustainable sustainable economy, we have to create enabling regulatory environment. Maybe one more example from the inside. We have so called ecodesign directive. Which means in practice that all the TV sets or laptops or other electric, electronic devices are regulated according this directive. It means that in the European markets you can sell products, which fulfills our energy requirement. So the TV set cannot consume more than, more energy than what is accepted in this particular law. And this has created a new market for energy efficient electronic devices. Even the Chinese companies who want to operate in Europe must fulfil our requirements. So this has become basically a global law. And and we just did, the Commission calculated a couple of years ago that alone this regulation has saved energy as much as what is Italy's annual consumption. By doing this kind of regulations, we can enable new business models rise and more sustainable products to come to our market. This is not an easy task because there's always a risk of suboptimization. The legislation. Or then there's a risk that we just ban or give stick instead of creating incentives.

Mari Issakainen: Thank you Mr. Katainen. It's always nice to see examples for these questions. Next we have a question from audience, from Raysa Franca. You can ask next.

Raysa Franca: Can you hear me well?

Jyrki Katainen: Yes.

Raysa France: Yes okay, so that's perfect. I had written my question in the chat, but I figured it was a very long, like the Bible, so better with the microphone. So I was thinking... Thank you for your presentation in the first place. I think it was very clear. When you were talking about wicked problems and how they are complex to solve, I was thinking that there is this kind of barrel of narratives going on in society about what would be the optimal solution for these wicked problems, for example, climate change. And then when you were mentioning about decoupling, this is a clear example of this battle of narratives, because some countries they have achieved related to decoupling, but others aren't. It's based on externalization of environmental and social harm to other parts of the world or unbalanced distribution of power and wealth, and of course colonization too. So I was just thinking that even the growth is not a recession, it's more planned and controlled process. So this is just an example that illustrates with solutions, there are always multiple views.

And here it comes, my question: thinking about this, how do you think these barrels of narratives they affect Sitra's work? How do you see that Sitra as a public institution that needs to conciliate these different worldviews and narratives, integrates this through its decision-making, its strategy, its decisions and policies and decisions for investment? And how do you ensure this principle of neutrality is respected? Because after all you're not investing with... You're not a private investor or an angel investor or shareholders, but you are public, public body, submitted to the parliament. So how do you integrate these different solutions into the into the pathways of your strategy, Sitra? I guess this was my question. Many questions inside one question. Thank you very much for the presentation and for the opportunity, for this.

Jyrki Katainen: Thank you very much. First about the role of Sitra. We are free in our activities. So we are not... We are accountable to the Parliament of Finland. But for instance a couple of months ago the Economic Committee of the Parliament which gave their report. Our annual report said that Sitra's role is to be think, do and connect tank which challenges the existing thinking. And sometimes it may mean that is raises criticism from some parts of society, but it's our duty. So I would put it all the way around it. Or say the same thing differently: so our duty is not to raise criticism or make big headlines, but our duty is to question the status quo and try to find solutions. Not only thinking, but solutions, which could address the biggest, the biggest challenges. We are not impartial in a sense that we don't need to be and we don't want to be neutral. For instance, we believe that the climate change is a severe problem. Also, biodiversity loss is a significant problem. We have our opinion on that in the same way we believe that if there's no economic growth, which is sustainable, we are in deep trouble. Having said this, we try to consolidate different views. But our primary aim is not to please everyone. It's very important to see the big picture, because we have a... Sitra has a luxury to concentrate on long-term mega trends and short-term experimentations at the same time. So, for instance, combining climate action to biodiversity policies and modernizing the market economy - it's something which is not that often done or thought by those who are doing actual political decision-making. So I don't know if I answered to your question, but we try to be disruptive sometimes. And offer a new way of thinking. And apart from this, we do experimentations, we test test whether the thinking is workable, whether it addresses the problem it has been created for.

Mari Issakainen: Thank you for your answer and question. Next question is from the chat. It little bit continues with this topic about who can you please. It goes like this: what do you think is the biggest obstacle in making rational decisions and implementing useful policy solutions concerning a sustainable future? Are the reasons different in politics and business? What role does ideology play?

Jyrki Katainen: This is a very wide question. Many different ways to answer. I will try to elaborate it from some angle. First of all, it's not necessarily different between private sector, or between companies and politicians or public sector players. Depends on the person or depends on the company. For instance, if you look at Business Finland. The organization or confederation of Finnish businesses. They have publicly said and this is I guess in their strategy, that they want to change Finnish business and influence the European businesses to become more sustainable, because climate change is a threat to the societies and to business. They have voted already. Finnish industry, industrial organization, says that climate change is the problem to the societies today and that's why they have to react. So this I see as a sincere assessment of the problem. Then they have other motivating areas, like increasing consumer demand for more sustainable products or more sustainable behavior of the companies. So once they live in the market situation, they must please the clients. And this is one of the driving forces. That is by the way the reason why I believe in the power of the market so much. Because if we can combine zero carbon industrial production and consumer demand, it means that we have jobs, economy is growing, but it's not emitting more. Some may think that this is wishful thinking, it's a big fish which is worth fishing. Then when it comes to the politicians, of course the values and ideologies has a big role. And also the level of understanding... I don't want to mock politician of not understanding but sometimes... For instance, I don't understand why somebody is not attracted by the idea that circular economy can save the world. I've been a politician and I find it a really attractive way of thinking. And especially in the European Commission when it was of my main jobs. It was so fascinating, so encouraging to think that I can change, I can make a systemic change to combine economic growth and climate action. So there are also ideological reasons. And what is what is very negative today is that climate policy as well as other some other policymakers have become part of identity policy. So people identify themselves to certain type of group, people, saying that I look like this, I live here I'm denialist, I want to build wall around my neighborhood et cetera. And once something becomes part of the identity politics, then it's very difficult to deal with facts. Because if your identity is based on certain belief or certain character if somebody tries to take part of your characteristics away, it hurts. And it is a part of this post-truth type of thinking where alternative facts are replacing scientific facts.

Mari Issakainen: Absolutely. Then we can have now our last question. It's from the chat as well. We have some international audience as well, so I think this will be interesting for them. You know that immigration of foreign citizens towards Finland is ... a big concern for the inclusion of them with the society. As you are working in Sitra as a think tank for creating systemic change focuses on sustainable issues or building future Finland, you should have systemic systemic plan regarding incorporation of immigrants. In this consideration, what are the initiatives that you are taking or thinking for the immigrants for the inclusion to sustainable development in the future?

Jyrki Katainen: That's a very good point and an important question. Currently we don't have any work streams on this area. Incorporation of foreign citizens. I'm not sure if we will have, but it doesn't mean that it wouldn't be an important question. Sitra is very strategy-oriented think tank. We do only projects, which fit to our strategy. And currently we have three focus areas. The first one is democracy and participation or engagement. The second one is sustainability solutions, where we are where we are doing projects. Which are linked to biodiversity and market economy. And third, we have a fair data economy. So this question does not naturally fit to any of these. The closest theme to which it could be incorporated is democracy and engagement. Actually, we have had I'm not sure if it's still running, but we have had some democracy projects around the country which have concentrated on foreign citizens' participation to our society. The aim has been to help foreign people, who have moved to Finland to understand better how our society functions and how they can influence and what for instance municipality councils are doing, et cetera. So we have been involved in this kind of projects. If putting this in to more generic environment or context, I very much agree with you, because the country, which manages to integrate foreign people the best will benefit a lot in terms of employment, in terms of stability, in terms of well-being. And Finland absolutely needs more more immigrants. We need people to work, because our own population is shrinking. It's a biological fact, not an opinion. And we have to let people to come. And then from the other angle we as human beings we are responsible of those who are suffering for whatever the reasons. Of course one country can not take more than what is sustainable, for instance refugees, but the limits are not close not close yet in our case. If there are wars or other misery situations in some parts of the world, we have to bring help as human beings.

Mari Issakainen: Thank you Mr. Katainen for all the answers. Now we have asked all the audience questions, and now I will give the floor to Paavali to summarize our lecture.

Paavali Koivula: Thank you. And before wrapping things up, I would like to ask one more general question. As you are an alumnus of Tampere University, and as we are students of Tampere University, we would like to know what would you highlight from your university studies in Tampere. For example, what were your best memories and what advice could you give to students who aspire to be in leadership positions in the future.

Jyrki Katainen: I only have positive memories as you can imagine. So I like Tampere as a city. Our student community was very close. I was studying Political Science. And a little bit of Public Administration. And Iltakoulu was my community there. Being a part of Iltakoulu, and I'm sure it's the same with other student organizations, it it's kind of a family. When you belong to it, you are never alone. It was also a community that helped to prepare for exams, and to share views on studies. It was great time. And what I would suggest... I don't know what are the exchange figures nowadays, but I just think that there's more or less place, I mean study places for all of you available. It would be a sin if you wouldn't use it. I really encourage you to go abroad for an exchange year. I did it. I went to Leicester University in UK. I must say that it changed my life almost entirely. I was the first time abroad alone. My family wouldn't, couldn't afford to send me abroad to study, unless unless I hadn't got the grant from Erasmus+. Unfortunately this is not possible anymore for UK, but there are plenty of other countries, which Erasmus+ covers. It changed my life in many terms. And I'm pretty sure that I wouldn't have had a chance to experience what I have without this exchange year. And it's only positive. So please, use this opportunity. Go abroad for a while and come back. Because it's a huge investment to yourself. You are always richer when you come back than without this experience. So use the liberty which you have and the freedom which you have when you are a student.

Paavali Koivula: Thank you very much for the great advice. And I can surely say that the students' organization life is still as vivid as it must have been back then. Now we would like to give a big thank you to you Mr. Katainen for finding the time to participate in our LFC Lecture. And thank you to the audience as well for following the lecture and joining again on Thursday 18th of February, when Anne Larilahti, Head of Sustainability for Finnair will join us. Until then, goodbye. Thank you.