Resilient and competitive cities are key to coping with the challenges arising from globalization. Helsinki’s “world most functional city” strategy was implemented at the end of 2017. Looking at their strategy and talking with their strategic manager Mr. Marko Karvinen offers some interesting insights and learnings.
“I firmly believe that cities are increasingly important in solving the most pressing global issues.” Jan Vapaavuori, Mayor of Helsinki
Helsinki, the capital of Finland and by far its biggest city, has a population of approximately 650,000 residents estimated to rise to 700,000 by 2026. Helsinki, like numerous cities around the world, has to deal with both an increase in population and competitive pressure from other cities globally. The United Nations estimates that the percentage of the population living in cities will increase from 55.3% in 2018 to 68.4% in 2050 while at the same time, the entire population of the world could increase by another 2.5 billion. In Europe, while the total population will decrease slightly by 2050, urban areas will see an increase with 83.7% of the population living in cities in 2050.
As cities all around the world see increases in population and connectedness, they are becoming more powerful. However, at the same time, they face more challenges as they are increasingly more exposed to global issues. Helsinki’s approach for coping with that is to build the ‘world’s most functional city,’ which conceptually relies on stability, openness, and diplomacy.
For Helsinki to be a functional city with the ability to cope with global problems meant establishing a well-organized, reliable, and predictable operational environment and an agile organizational culture viewed as the best economic and business policy.
Digitalization is a main component of this strategy. The city government of Helsinki itself strives to utilize public data and educate its staff on digital technologies. Leaders see a tool in digitalization that can enrichen lifelong learning.
Remarkably, it is their eye on social divide issues that help distinguish Helsinki from other cities as they focus on reducing inequality and preventing social segregation. They emphasize their affection for internationality and openness. In respect to tackling climate change, Helsinki set up the ambitious goal to become carbon neutral in 2035 instead of 2050. The essence of the strategy, in one sentence, is:
“Global competition increasingly means competition between cities and city-regions rather than between states.”
A talk on Helsinki’s strategic approach with Marko Karvinen – Strategy Manager of Helsinki
Helsinki’s “functional city” strategy was implemented at the end of 2017 with a time horizon of the end of 2021. As of now, we have about half of that period left.
I spoke with Marko Karvinen about the progress so far using the functional city approach and what he thought would be relevant for Helsinki in the long-term.
Here is a summary of the most important issues which we discussed:
- Which concrete measures did Helsinki undertake to implement their functional city strategy?
- Important in Helsinki’s holistic functional city strategy is the definition and measurement of concrete targets in specific areas. Therefore, the city has implemented a bonus system for their workers so that they get an extra salary for achieving these targets. There are specific targets for specific services that can then be used as KPIs (e.g., How many services are digitally available? How many minutes do you have to wait for a phone call?)
- Furthermore, the city puts a focus on service-orientation. There exist a total of 50 city indicators available to assess performances of services. People can assess the services offered by the city. For example, it is an option to press an emoji button in the library for the assessment of the library service.
- Which measures have been a success?
- A great success was the launch of an initiative by the Mayor, where people could articulate their ideas, and some of them were put into practice. Those initiatives are necessary. On the one hand, because it addresses what people want. On the other hand, it legitimizes public services, which, in a democracy, speaking from the public sector perspective, is necessary to prove that what is done is efficient and, at the same time, benefits the people.
- Which are the biggest challenges in the implementation process?
- The biggest challenge for Helsinki is to change the culture of work from bureaucratic to service-orientated. Training the cities’ workforce is also important, but changing the culture is by far more crucial. Hierarchical management, as a characteristic of the public sector, is deeply questioned. For that reason, the city works with consultancies and universities to change the organizational structure and implement modern agile work techniques.
- Due to upcoming municipal tax reform and the pressure on social care and health care, it is a challenge to keep up the quantity and quality of public services for Helsinki. What is special about Helsinki is that the city gets a high income from rents. The city owns most of the land and builds many new houses on the land to rent them. When cooperating with investors, the City of Helsinki usually prefers to rent the land instead of selling it to the investors. This has proven to be a sustainable long-term strategy.
- Which are the long-term challenges for Helsinki?
- For Helsinki, the challenge in the long-term is that Finland, in general, is a small economy with a rapidly aging population. Therefore, immigration is a necessity. Even if many people in Finland dislike this idea, the quality of public services cannot be maintained in the next ten years without successful immigration and integration. Immigration of both high-skilled and low-skilled workers is required.
- What the city does to promote successful immigration and integration is to offer a fast check of all required documents and papers, provide language courses, and programs to change diplomas from the country of origin to a Finish diploma. Nevertheless, the issue here is that the City of Helsinki knows the importance of immigration, but national politics on this topic is controversial.
- The geographical location of Helsinki yields some other specific issues. Helsinki is by far the largest city in Finland. When organizing business events or conferences, the maximum size of these events is limited due to limited hotel capacities in the metropolitan region. Helsinki wants to improve in this respect in the long-term because the alternative of staying in another town doesn’t really exist.
- Moreover, due to the small size of the Finnish economy, it is sometimes difficult to get appropriate funding for business projects. On the other hand, Helsinki has expertise in specific B2B industries, such as maritime technology. Those industries are likely to be prosperous in the long-term.
- Which diplomatic relationships with other cities does Helsinki maintain?
- Helsinki has naturally strong boundaries with the other capital cities from the Nordic (Stockholm, Oslo, Copenhagen) and in the Baltic area, especially with Tallinn.
- Apart from that, Helsinki has started to think in projects rather than in particular city partnerships. There are good connections to Beijing, Shanghai, and Barcelona, while cooperation with German cities could be stronger than it is currently the case.
- There are good connections to Beijing, New York, and Barcelona. Take, for example, a project for engagement of people in the budgeting process, based on an open-source code from the City of Barcelona. To some extent, people could vote on how they wanted their money spent. Seven to eight percent of Helsinki’s inhabitants participated in that process. It was a big effort, but the plan is to do it on a regular basis, possibly every two years.
- Apart from that, Helsinki worked with Bloomberg Philanthropies in the US, increasing physical activity in the everyday lives of the elderly and is also part of Bloomberg Philanthropies’ New Digital Innovation Program.
- Which difficulties emerge from the gap between Helsinki as the capital and the countryside?
- In Finland, there is tension between people from metropolitan areas and people from the countryside. Not just the countryside, but also the outer circle of Helsinki. One of the mayor’s political initiatives is bringing together representatives of the 21 biggest cities in Finland at one table, which, as Finland has just five million inhabitants, will include some pretty small cities.
- Though much of the money earned in Helsinki goes to other places in Finland, Helsinki recognizes the importance of these transfers. While acknowledging it leads to the loss of a large share of the revenue generated, it is vital for country-wide support.