politics

I'm involved in Sitra's programme called "Elinvoima" and we recently visited Copenhagen, Denmark as a part of that. The Programme seeks to answer very important key questions in society like; what is "new work?" etc.

One of the interesting visits there was a Think Tank / Company called Monday Morning. They had some good fresh thoughts on how the welfare society in Denmark, and perhaps in Finland, could be developed towards something better. Here's a part of my take on that.

First off, they identified that a "new language" is needed in politics and in societal debate overall. They presented the following list:

10 IDEALS FOR POLITICAL COMMUNICATION

1. Focus on the ball
2. Respect disagreement
3. Recognize change and development
4. Be willing to explain and elaborate
5. Separate what we know, what we believe, what we think
6. Respect expert knowledge
7. Put forward arguments
8. Answer rebuttals and critical questions properly
9. Present your point of view
10. Engage the voters

(html formatting in this blog is crap, sorry about that)

In Finland we are pretty fraking far from these ideals in the level and quality of our political talk, as can be viewed here.

Focus on the ball: we just had parliamentary elections in Finland. Did anybody notice any of the parties really giving any detailed answers and plans on how we are going to create the required 200.000 entirely new jobs to support the current state services during the next 9 years? I didn't. Most of the focus went into vague political rhetoric about taxing "the rich" (who's that exactly in a country where the upper quadrant income is one of the most modest ones in the EU?) even more, and perhaps cutting way too little, way too late from government spending. And on speculation whether or not it would be beneficial for Finland to bail out Portugal (btw: to which my take is that there should not be government bailouts for anybody, for any reason, they distort more than they fix, and in this case it's about a transfer of income union from the producing countries to those that don't produce enough to cover what they spend).

Point number 5 is brilliant: separating what we know (for an objective fact), what we believe (our interpretation of reality), and what we think (our conclusions and projections of these facts and interpretations) would indeed be extremely useful. This is brilliant stuff. Similar communication is very useful if you are an executive, a startup CEO, scrum master, or anybody at all who needs to communicate between groups and teams of people who don't always observe the same facts and entirely agree on everything. This kind of 3 level separation gets people thinking more - and more than that, it gets them to commit to action more. It also facilitates learning.

For example: if a team of startup software engineers have just today somehow broken a product built that's due to ship tomorrow morning - what do you do as the manager? You can always go talk to them an offer your own conclusion right away, without explaining or separating any of your communication. Going there and ordering "you two, fix the broken build now!" will probably lead to some action; but how much did the team like this order? How much did they commit to that solution which was in fact your conclusion of the events and not theirs? Instead you could walk over and start with: "hi guys, my monitoring system there is telling me for a fact that the build is broken" and just pause. That might be the only thing you need to say: people with initiative will take it onwards from there and take care of it. They may even reply right away "yeah we know, it is already being fixed by Alberto there, while the rest of us figure out how we didn't catch that glitch in our tests". If the team waits for you to solve the issue for them, you can always challenge them a little more and continue with "I believe this is quite bad for us, as we are about to ship tomorrow morning. What are you planning to do about it?" and still at this point you have not offered your own conclusion to the team; they still get to form the conclusion and commit to resolving the issue themselves. You don't need to go as far as saying "I think you, Jenna, need to fix the build, while Alberto there gets me a cup of coffee", which would be you being a daft prick.

We see bad communication all the time in politics and certainly encounter it in management. Startup CEO's are no better; many of them are clueless on leadership and how to resolve team issues.

Monday Morning's 10 ideals in communication might as well be startup ideals in communication with the word "voters" replaced with "customers".

Another good sound bite from their list are numbers 7, 8 and 9; arguments and properly presented answers to critique.

I urge you very much to read through this list:

http://www.astunit.com/astrocrud/flaws.htm

It's an excellent list with 30 flaws in argumentation. Flaws like: error of fact, contradiction, deliberate distortion (or omission), irrelevant data, failure to specify, accepting hearsay as fact, wild speculation, non sequitur, argumentum ad hominem, appeal to widespread belief (non-fact), argument by analogy, appeal to authority etc..

Some of the names of flaws in argumentation are in latin; because the ancient Romans already in the days of Senatus Populusque Romanus taught argumentation in their highest educational level: the rhetoric school. One of the ancient leaders of this skill was Marcus Tullius Cicero. This art has been going downhill ever since; and is no longer taught in the Finnish school system at all. And thus we can observe the results of an entire nation who no longer knows how to form proper arguments..

How many of those flaws did you notice during the last electorial debate? I noticed all the ones I listed up there, many of them over and over again several times.

Why is it then that we are stuck with a shit-level of debate and populistic bullshit one-liners instead of actual intelligent political communication?

The answer might have something
to do with this. If people are so ignorant or fraked up in their brains that 69% of them can't even name the political parties in the cabinet correctly then you might think that perhaps we deserve this?

What about us other 31% that can name them, and actually have a clue about the surrounding reality then? Is it justified to lock us in here with folks to whom every day is a miracle as they somehow manage to survive it without accidentally suffocating on their own tongue?

Nah, people have the full right to be stupid and ignorant. We have to take responsibility in our actions as individuals ourselves; and if we are not happy with the situation we must work to change it. Being stupid, or being ignorant, is no reason to limit anybody's liberties and individual freedoms. Even if the person is so extremely stupid that he's a danger to himself. Not even then.

We can work towards these communication ideals. Let's hope they could someday shadow the real state of Finnish public debate.

---

Another suggestion by Monday Morning was;

We need a new mindset in society.

(this blog doesn't allow me to format a table with full html, sorry for the crappy looks of it).

Now some of this proposal is a bit too statist in my view.

Many of the most successful public-private partnerships have been the kind where the public (the state) understands to stay out of the way and let the private side and market mechanisms solve the common problem for us all. A public solution is often enough no solution at all. Government is monopoly by design and by fact; and is equally bad in serving its clients than any total monopoly is. This also applies to public-private partnerships.

At the current rate there's no change Finland could afford to maintain such massive welfare state services. Some people consider it to be "solidarity" to use force against other people and make them, whether they want to or not, by force, to help others. Using violence on others to force them to do charity against their will is not my idea of solidarity. The state should exists primarily for ensuring and guaranteeing individual liberties - which means guaranteeing very specifically that violence isn't used against anybody. A pacifistic world where the state guards its citizens against violence (even from the state itself, or from other states via defense forces) would be a much nicer place to live in than our current society, where too often people's rights and liberties are being trampled upon - often enough by the governments.

I often advocate personal responsibility in place of a forced non-optional collective responsibility (those kind often in fact become non-responsibilities as everybody resigns them; as in "I don't need to help the homeless, because the government does.. don't they have programs for that and shit?"). In Monday Morning's model this is perhaps the best part: championing for personal leadership, individual responsibility, and quite simply for being human. If you force people to do charity against their will; they are quite angry about it all the time. If they do the very same thing voluntarily they probably experience a great deal of personal reward, bliss and happiness from it. By forcing them, you take out the joy in giving. Think about that.

One of the central things on MM's model is flexibility: they have quite keenly realized that the world, day and age we live in can't continue in a happy state with the old slow moving non-flexible models. We need to be more like agile startups as a society: experimenting, failing fast, building models and structures that make us quick to adapt to change. Quick to reinvent and change ourselves, like Proteus of legend. Laying the foundations that allows us to weather an occasional tempest and stay firm in the mids of chaos and conflict.

Sense Amid Madness, Wit Amidst Folly.

Perhaps it would be time to abandon a lot of the old thinking and thought models in Finland as well? Perhaps take a few lessons from our Dane neighbors and see what as responsible individuals we could get done about the whole enchilada?

Or perhaps a better way to go about this entire thing would be to form a startup coutnry: www.seasteading.org is your answer there. The world needs startup nations and societies as much as it needs startup companies. Governments are monopolies, and the business of government is an entire industry with very little innovation and competition. We need Seasteads to offer us alternatives and come up with new models. That starts to have a great deal of appeal when you consider the alternative route of compromise upon compromise and slow incremental change.. doesn't it?

Today me and Lasse Männistö published a finnish language proposal about renewing the growth company / startup financing in Finland.

As any experienced startup entrepreneur in Finland knows; the state is heavily involved in giving grants and loans etc various kind of direct and indirect support to companies. All together there are about 100 different instances, giving out over 1000 separate instruments of support, that total over 2 billion EUR annually. This is quite complex and quite confusing.

One interesting stat from the "support jungle" is that there are approximately 4-5 thousand government officials involved in this machinery (by a wide definition) - and arguably Finland has less than 4-5 thousand strong growth companies; so in essence we have a system that has more than one person working it for each growth company we have.. Doesn't sound very efficient, now does it?

Our finnish language proposal can be downloaded from here.

And the associated press release from here.

What we are proposing is just a good start - something to get things moving. Naturally there would be more action following these initial steps. We formulated our proposal to be politically easy to accept and realistic. It is designed as an expense neutral program: meaning that it would not increase government expenditure; in fact there's a rather high chance that it would produce money instead of drain it.

In brief, we propose:

1) Tax breaks for innovative R&D activities. Finland is just about the only western country in the world that doesn't use these kind of tax breaks. Even Germany started using them recently. Many others like Norway and the Netherlands use them extensively and with very good results.

2) Incentives for angel funding and other seed funding. This kind of model has been successfully implemented by Singapore, Israel and to some extent (with very heavy tax breaks) by Canada as well. We would need incentives for business angels, and for grass roots level funding from the groundswell. The state needs to get into market driven asymmetric funds and let commercial free market mechanisms decide what kind of innovations to fund - encourage growth by other means than government official decisions.

3) The support jungle machinery needs a reform. It is too inefficient and too massive for its own good = there are not enough good results coming out of it per cost of running it.

The job creating power of startups is amazing; when it comes to new jobs they are not the major thing; they are pretty much the ONLY thing. They drive job creation and growth more than anything else out there. They drive prosperity and wealth. We don't need another monolithic Nokia in Finland; we need a thousand Angry Birds and a lot of things we can't even predict yet - that will raise up from the mists of creation to conquer the world!

If you agree with this proposal; expand on it, champion it, talk about it to political decision makers and make noise about it in general! With the elections at our doorstep there is a genuine chance to get positive things done in this very vital and important field as well!

I'm also very interested to hear how the proposal could be even better?

Edit (20.3.2011 18:48) Petteri Koponen has good commentary on this, here:

http://serialtrier.wordpress.com/2011/03/20/on-improving-finlands-startu...

Let me start by issuing a: long rant warning! :) I'm letting off a bit of steam here; much of which has been piling up along the entire length of my entrepreneurial career.

This blog post draws fuel from a few recent events:

Today Ramine Darabiha my fellow entrepreneur was speaking at the Parliament of Finland about the country's entrepreneurial ecosystem, as seen by someone with a non-native perspective. His presentation can be found here. Great to see Ramine there, great to hear that somebody at least is interested on the topic at all!

Also I was recently asked by the Finnish information society development center to voice some of my opinions regarding this topic in an upcoming event. In addition to this a certain political party asked my help to prepare a memo on the subject to offer more expert-level information on the matter.

I was also recently interviewed by Bloomberg regarding this topic. Very interesting stuff, indeed!

Thus I have been digging into this topic quite a bit recently (checking my facts, checking my assumptions, making more analysis etc) and while it is still a work in progress I decided to write a little something about it to get more discussion and reflection going.

(CC) image by aloshbennet@Flickr

Let's start with the positive things. There are many, and these are primarily the reasons why I still keep going as an entrepreneur in this country.

(sorry about the font size and the spacing in the list; this blog forces that format; can't seem to be able to affect it in ANY way with html codes, suxor ;))

1. Opportunity. It's there. It's possible to "get big" and get noticed from Finland, have seen it multiple times. Angry Birds anyone? =)




2. People. There are better people here than the country deserves to have. People who work hard, try hard, who are smart, competent, open-minded and a blast to work with!




3. Talent. Subset of the previous: there is genuine talent and creativity available here. Great engineers, inventors, creative people, thinkers, etc




4. Business freedom in Finland is one of the best in the world. Companies are relatively easy to set up and get rid of (if needed)




5. Property rights are mostly protected in a very good level. What you start and own as a business, is yours to keep (most of the time) supported by rather strong legal backbone




6. Entrepreneurship as a career; is still by far the best career choice in Finland. It is the career where you can not only make the most amount of Euros (a faith-based currency of no intrinsic value), but also explore the limits of your talent, competence and skill in a very demanding set of circumstances




7. Freedom to act; being an entrepreneur in Finland is still relatively free and open-ended. This gets risk takers excited!




8. Efficient infrastructure: Finland (a lot like Germany) is one of those places where things actually do work quite well and in an efficient manner. People don't "fuck about" doing inefficient time-wasting tasks (in general) but rather get the job done. Infrastructure is generally quite good, everything runs roughly on time and it all functions; right up to relatively low levels of crime and civil unrest etc




9. Betterment (excelsior). There's a lot of people in Finland that are deeply unsatisfied with the current situation and actively seek to better it. Get more done, do better, be more productive, etc. And this is excellent; it's what keeps the place alive instead of slowly dying when its occupants give up on it. Often Finns do this through whining about things; which can be mistaken as just plain whining or being negative about things - but actually often is just a critical take on the circumstances and contains the seeds to better & develop it.




10. Respect towards Reason. Finland is still a place where reason, evidence, proof, logic, fact and a rational mind is respected. Mostly at least. If we would ever lose track of this we would quite quickly slide to the insane abyss (Greece, anyone?). All tho politics seems to be a particular place where it is rare to see reason respected let alone acted upon




11. Finland is number 17. in the current economic freedom index ranking, above Sweden, Austria and Germany. Check the top list from here, and Finland's individual ranking from here. In fairness I have to point out that this index probably misunderstands the level and extent of Finnish corruption, which is often obfuscated in such ways that these kind of studies don't know how to account for it; so in reality our score would be lower (due to extensive corruption in this country)

(CC) image by KB35@Flicker

Things we could change towards the better.

Finland is an old rusty car; yes it's running and it functions. It looks horrible and it is a total joke when compared to our potential at our best. We could do so much better, and look so much better while doing it!

Here's a "short" list of things that have come up over the years, big and small issues we could strive to change towards a better world.

1. The government of Finland gives truly massive subsidies to mortgages and housing debt. Politicians have erected a multitude of mechanisms that encourage people to go as deep as they can (and over) into inflated king-sized mortgages in a clear housing bubble market. Government has (just listing a few things) for example erected these subsidies: special savings accounts for buying real estate, if you save to them the government pays a part of your investment. If you live in a house for more than 2 years the real estate sale from that is tax free. People are allowed to get mortgages with no collateral for 100% of the purchasing price of piece of real estate. Mortgage interest payments are tax deductible. You get additional tax-kickbacks and support if you are a first time home buyer. etc.. This is truly massive subsidy and in effect means that it functions as a mechanism to support banks, financial establishment and tie everybody up to their eras in deep debt. Also this mechanism ensures that those who don't take mortgages pay for the mortgages of those who buy real estate - the government has no money of it's own (it's the money and the property of its citizens) and when the government erects mechanisms like this it is in effect a direct wealth and property transfer from those who rent to those who buy their own place (and pay for it dearly to the banks, for decades to come). This subsidizing machine is so severe and extensive that it limits the amount of risk Finns are willing to take in their lives. If you are up to your ears and beyond in debt, and deeply invested in a piece of real estate with fake bubble value; how much risk are you capable of taking in your life? The answer would be; next to nothing at all. Thus we don't get more entrepreneurs, we don't get grass roots business angels (friends, fools and family don't have the capital to invest anything as it is all tied up in fake-value real estate subsidized by the state. And even if they did; they are afraid of investing any of it as they have to be capable of meeting the oversized mortgage payments), and in general we don't get people who are willing to risk anything as a result.




2. Tekes. The Finnish funding agency for technology and innovation (that funds startups) is very slow to react to any changes in the market conditions or in the ways how startups conduct their businesses. Grave examples of this are that it typically takes 1-1.5 YEARS to get any technology programme started in Tekes (if a hot area emerges first it takes a long time for it to be recognized as hot, eventually if somebody decides to start a program to fund it, it takes more than a year from that point onwards to become a reality). Agile methods (Scrum and the like) have been the daily life of startups for years already, and Tekes is still yet to adapt: they still have no processes to even evaluate an agile startup properly. This is slow, sluggish and non-competent behavior. The talented individuals in Tekes can do better I believe. This same inefficient and slow way of operating can be seen in many government instances across the board




3. Many decisions of government officials are arbitrary or even seemingly random, not uncommonly without proper justification or reasoning provided. I have many personal examples of this; one of these cases I even took all the way to the highest court in Finland and won my case (in this argument anyways). It was a classic arbitrary & random baseless decision by a bureaucrat trying to weasel out of a situation with the motive of self-interest. The worst horror stories of this topic are often related to the tax office and their decisions that go directly against tax law and their own rules and previous decisions. The actions of government officials can not be unpredictable - otherwise that constitutes a huge unmitigated risk for businesses




4. Entrepreneurs are NOT rewarded for the risk they take. Finland extensively uses what's called an "ability to pay" principle in taxation. Meaning that if you have property at all - that itself is used as a justification to tax you more, because you have the ability to pay. It doesn't take much consideration to notice how profoundly evil and morally bankrupt this is; treating the best and most talented of us as human sacrificial milking cows that can be whipped ever more in direct proportion to how much they produce. An entrepreneur takes the unmitigated risk and is "rewarded" by the tax schemes of Finland by a taxation that is always higher than any employee's. Naturally this goes directly against the economic principle of decreasing marginal utility and how you should motivate the most productive units in your system to produce even more. As a result we get disencouraged talented people that are pushed to move overseas; and many do so. We are experiencing a significant "brain drain" to the US and even to Estonia, which offers way better rewards than Finalnd does. I can clearly see and understand why this is.




5. There's a general negative attitude towards entrepreneurs. With some professionals in the media the attitude is more accurately described as "hostile" instead of just negative. The GEM consortium surveys and researches attitudes towards entrepreneurs world wide, and guess where Finland is? Often at the very bottom. Finland also has the oldest entrepreneurs in Europe; due to all the negative things and the demotivation of taxes and mortgages young people simply won't become entrepreneurs. In fact there's a popular saying in Finland that an entrepreneur is someone who was unable to get a real job - which gives a good anecdote of this attitude




6. If you are in any way involved in a bankruptcy of a company in Finland (as the CEO, board member, deputy board member, or former CEO or (deputy) board member during the past 6 months) you get a really rough sentence: you are slammed with a 6-year personal credit rating information smear saying that you are not only a total failure and a fuckwit but also a significant danger and risk for any business activity at all - thus as a result this negative credit rating follows you around to every single company where you might act in any trusted position and decreases & negatively affects the risk rating of that company; pressing it down a notch. Also people who view the risk rating of such a company get to know the reason; they are shown that the reason is that there's a person with "negative trust position history" in the company; meaning some particular failed bastard who committed the sin of bankruptcy. This is quite harsh indeed; especially when this negative rating will be slammed to you entirely regardless of the circumstances of your bankruptcy. Even if you simply discontinue your own one man company through the usual bankruptcy proceedings in a situation where the company doesn't even own money to anybody: you will still get this rating. It would be easy to fix this: just make 3 categories for bankruptcies; 1) those without any dispute and any debt don't get treated this way at all, they are free to go. 2) Those that have been initiated by an instance to whom the company owes money to could get a rating stating specifically this. 3) and those that are a result of economic crimes etc mischief would naturally need to get a rating also stating that as reason behind it. The current system that treats even every business angel in the board of directors of a failed company as a criminal is just simply mad and unhealthy




7. Employing people in Finland has been intentionally made very expensive and difficult. If you checked the economic freedom index from above this is also one of the fields where Finland gets a really poor score. For a startup nothing is as expensive as hiring people; with all the social costs included in there. It is also almost equally difficult to get rid of people if the startup needs to cut costs or simply let someone go due to their incompetence. This costly, heavy and inflexible structure severely limits the global competitiveness of Finnish companies and holds them back from growing faster. It also holds them back from implementing smart HR policies and actually rewarding people who perform the most; often also the reward side is strictly monitored and regulated in Finland. As a grave example; stock options have been pretty much entirely destroyed as an instrument to use in any situation due to the extremely negative taxation on them. If a company in Finland gives the employees 100K eur worth of stock options; it would have to pay truly massive taxes from that, tens of thousands of euros. The employees themselves would have to pay up to 65% of taxes; leaving them with remnants of the original value. This is madness (and not Sparta)




8. "the usual". A friend of mine (hello Rami) recently did an entrepreneurial document film in Finland; interviewing 10 rural area entrepreneurs running smallish firms. He was telling me that he might have just as well done 5 interviews; since all of them are the same, "the usual". Every single one of the interviewed people stated the same: madly negative taxes, frustrating bureaucracy, negative attitude and lack of support. "the usual".




9. Taxes. There's so much we could change towards the better in taxes that I'm not even going to go that deep to the topic here. Just picking up a few big-impact things. Estonia has no corporate tax at all if companies keep the money in the company and use it as capital to expand the business, very much smarter than in Finland where the companies pay around 135 million EUR of tax TO THE CHURCH each year by force (not optional) - let alone how much they are forced to pay tax from their earnings. This is often double or triple taxation: the government taxing money that has already been taxed at least once directly before. One particular madness is the VAT and forcing it fully on even the smallest companies. A one man company in Finland typically has to deal with VAT, making it a huge administrative hurdle taking up significant time away from the business. How much time I personally spend purely on VAT per each year? About 6 full days. That's 6 full days of my life per year that I'm never going to get back. 6 days that are stolen from me simply because of the bureaucracy. It would make perfect sense to exclude small and growing companies from this VAT bureaucracy all together and simply refund them the tax without the necessary administrative work. Or better yet, get rid of VAT entirely and implement a sales tax instead (just like in the US, and many other places, with more dynamic economies). Finnish taxes are so insane that corporations Finland even have to pay direct taxes from the government subsidies they receive! How crazy is that! (the government directly taxing money it itself gives out)




10. Too many bureaucrats don't want people to succeed. I have encountered this very troubling socialist attitude so many times over the years: having talks with bureaucrats who genuinely don't want people to succeed. Couple of evil lines heard over the years keep resonating in my head, like; "we give these subsidies to companies with the principle of: everybody has to get a little, and nobody can get enough". That's just total bullshit and leads to only vastly negative things. There are worse statements heard over the years naturally - extending all the way up to genuine fascism. Big corporations having very very close ties with the government officials, effectively forming an alliance against the citizens (not for them, but against), doing all they can to preserve the status quo and limit competition in every way possible. There are many apparent and good examples of this mentality in the Finnish economic structure: a bunch in how municipalities spend their public budgets on a pre-agreed status quo plan, many examples in the health care system, some with the insurance and banking segment, and a very apparent one in the mortgage / real estate market. This is the visible result of the Finnish obfuscated corruption I was mentioning earlier on; here you can see where it clearly shows.




11. Education policy in Finland is not producing entrepreneurs or even useful people for growth companies. Higher education has its emphasis in problem solving rather than problem definition. Changing the focus to problem definition capabilities, to the capability for independent critical thinking, would be a 1000 times more valuable focus than the current problem solving one. I have been talking about this for years already - however it is a topic that's very difficult to change. All higher education in Finland is public, there's no private universities around. Thus all education policy gets decided at the ministry and the board of education. These government instances are both clueless and totally absent from anything at all to do with growth companies and entrepreneurs. They desperately repeat models that are from last century and deeply hurt the potential and competitive advantage of Finland as a nation. Just one simple shift of focus; from problem solving to problem definition would spark so much more creativity, entrepreneurial activity and competitive advantage for Finland!




12. Foreign capital & investment. We don't have much of this in Finland, and it is very easy to see why: tax incentives and the rewards are simply not there. We are an economy for the remote backwater offices only (not headquarters of anything, and certainly not places where you would invest in). We would absolutely need a national agenda for attracting much more (say a 100 times more would be a good start) foreign capital and investments into Finland. The difference when compared to other regions we compete against is very visible and notable; we are totally the backwater of the world where nobody wants to invest in. Not nearly enough at least. One Google data center doesn't quite tip the scale yet :)

Image by me, in St. Tropez this summer. (heavily modified Ferrari Enzo)

How mend our old rusty clunker then? There's a few ideas we could explore and even implement.

We could change the nature of our politics, as I suggested around last independence day; in here.

a) Taxation obviously painfully needs to get revised and changed towards a more competitive climate: if we don't we will simply see more brain drain and companies escaping abroad. They already do that as we speak. The only thing preventing even more brain drain is the mortgages and establishing a family in Finland. Many who are already long gone had none of that baggage; thus it's an obvious smart choice to pack up and leave (while you can still escape). Why be here if there rewards are elsewhere? It's an entirely fair question. Punishment in place of rewards also directly tells talented people that they are not wanted nor needed here.

b) We could specifically use a dedicated tax-committee inside the tax office that concerns itself only with growth companies, Born Globals and potential great startups. This would be a group of people that actually understand and follow the space. Know what are the differences between high growth companies and the rest, etc. This group would be capable of making smarter fast decisions that are consolidated, and they could take real responsibility of the "customer relationship" (if you can call it that) of growth companies towards tax obligations and Joe Public.

c) Better focus of government subsidies. The opposite to the horrible attitude of "to each a little and to nobody enough". More programs like the young and innovative companies program at Tekes, or the Vigo programme. Either that or stop the subsidies all together; and refund the money back to the corporation by truly significantly lowering (-20%) or entirely abolishing their taxes.

d) Attitudes need to be influenced. We can't simply accept all the negative things out there. This is where http://hmea.fi and http://aaltoes.com and others do a great job! All thou even them should preach less to the choir of already believers and more to the general public with a mission to truly change these negative attitudes.

e) We should establish a "special economic zone" (as they are called) possibly with Aalto university or some other suitable instance for high growth companies that are truly born global and aim to become huge right from the start. This would be a great place for university spinoffs etc. Concentrated incentives, motivation, help, resources and encouragement for them (no to mention ample foreign investment if they need it!)

f) The truly vast and massive scheme of mortgage and debt subsidies needs to be taken down piece by piece. It is unhealthy, unjustified and it simply must go. I suspect it has to go gradually, otherwise there's too much of a near term shock involved; people could possibly even wake up to realize how deep in debt they really are and how overinflated the real estate bubble in Finland really is.. and we can't have that, now can we? =) One obvious thing to change in this regard would be the idiotic land zoning laws granting Finnish municipalities a total monopoly over new zoned lots for real estate - thus they limit the production as much as they can and cheat the game to their own advantage every day. (this is done by selling expensive lots, zoning land to big corporations who never build anything on them, and by a real estate tax that is tied directly to the value of the land; thus the higher the land value the more tax you get.. what would you do if you were in control of how much new land gets zoned? That's right; you would zone as little of it as possible, and keep collecting those high sale prices and high taxes).

g) deregulation, taking down harmful structures, etc must be ongoing, faster and deeper. We can't allow the kind of "status quo preserving" corporate-conservative structures to be in place for much longer. We need a liberal approach, libertarian even, free markets, less government regulation and influence, and more positive motivation rather than intervention. We also need better and progressive tools: e-government, e-healthcare, e-education, etc. Check Risto Siilasmaa's speeches and key notes regarding this: brilliant stuff indeed. Strongly supported!

h) The job market and the cost to employ people simply needs to change drastically: we have a very high unemployment rate that's being totally artificially maintained. If we were to remove obstacles from insanely high cost of employing people, we would see a lot of the unemployment melt way pretty fast. Strong labor unions also significantly promote unemployment as they only cater their own members and continuously strive to make it harder for anybody else (non-members) to get a job - very effective in making the structure and dynamic more rigid and limited.

i) we could do so much more to attract foreign talent into Finland. One obvious thing to do would be to give them tax relief or incentives to work here. In fact this is being done by the EU. There's an EU chemical agency in Helsinki: are you aware that managers there receive about 9000 euros of salary a month and they pay 0% tax from it? The EU uses tax incentives to attract talent from all across the EU to work in agencies placed in random countries. Smart thing to do; you surely get better people that way. Finland should do absolutely the same; give similar tax relief to people who are recognized as unique foreign talent, working here to speed up and help our growth companies succeed!

j) We could move the massive debt-subsidies of mortgages and real estate to a place where it would actually produce something; to subsidizing business debt, investments, r&d, organizational development and exports. Placed in this use it would actually provide a tangible return instead of just creating a massive real estate bubble, which is what we have now.

k) Incentives to keep accumulated wealth and capital in Finland (instead of moving it out). This would include incentives for startup exits: if you keep the money in Finland there's less tax etc. And other such similar mechanisms that don't exist now. In addition to brain drain we are also seeing severe capital drain; I know of many cases where Finnish entrepreneurs specifically don't establish their new companies into Finland, and they purposefully move their capital and assets out of the country to a place that's much more competitive globally - precisely as they should. They are just being pragmatic and smart about their own well-earned rightful property. This is where we, the people of Finland, lose however; we have intentionally erected structures that encourage this, are not competitive and hurt ourselves as a result.

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here's a few other issues:

* I don't see funding (VC's, Angeles, etc) as such of a problem; the FVCA does a fair job and great companies still do get funded as they should. There are inefficiencies for sure, but they are not as serious as the ones described above.

* There's plenty I didn't list in there that the companies themselves should be doing: they should be smarter, have better leadership, better interpersonal skills, take better care of their people, understand their business and customers better, be more bold to take on risk, want to grow more, etc etc. naturally only part of the burden rests on the government and society and a lot of it rests on the companies and individuals in them. They should get serious about doing much better as well.

* We are running out of time: whole of Europe is pretty much stagnating and falling behind in global competition. We will be the sore losers of tomorrow unless there's a genuine sense of urgency to do something about these things NOW. Waiting only makes the necessary changes seem more harsh later - as we have to make them anyways.

.. naturally there's more on my list, but as I said this is a work in progress.

Now what would you add in there?

Today, 6th of December the Republic of Finland celebrates its 92nd Independence day. The year 2009 has also market the 70th anniversary for the beginning of Winter War. Finland held firm against vastly superior numbers of the Soviet forces, causing them massive losses in their illegal attack against Finland.

Finnish Winter War soldier with a machine gun
CC Attribution: Matti Mattila@Flickr

Some of that fighting spirit still remains and has recently seen itself realized in the middle of this economic crunch - perhaps most notably in the increased effort and more positive attitude towards entrepreneurship and grass root sources of economic well-being for Finland.

Over the past months and weeks I have had many good conversations among friends, professionals and with people that care deeply about the state of this nation and its future. Those conversations have sparked a few radical and highly idealistic ideas I'll open up for discussions and debate here.

The problems

Problems are always a decent starting point. After all if there are no painful symptoms the cure is less likely to get developed. Finland today is experiencing at least these symptoms:

• Short-sighted politics is hindering true long term sustainable change and development.




• Politicians are always waiting for "the next elections" and frequently using that as an excuse for inaction. Most recently this precise excuse has been cited as a rationale to do nothing about innovation policy and esociety issues.




• Finland in 2009 seems to be a country of little strong opinion, little true action and truly getting things done. We seem to be about writing plans, memos and organizing committees that have very poor net impact on reality. Lots of movement and hazzle, but very little measured net change towards the better.




• There seems to be very little true transparency and accountability, especially in politics, but also in our courts and different areas of public service.




• Our politicians create more, and more complex, laws all the time; yet the problems they are aimed to fix seem to grown and linger in there. Doesn't this make the effect of laws quite questionable in the current system? What exactly are they good for if they don't solve the problems they were supposed to solve?




• Finland has a few taxes that arguably cost more to administer, oversee and inspect than they actually produce in tax revenue. Apart from being just plain stupid; this is also a problem that hinders growth and prosperity.




• There are additionally even more taxes that place such a heavy tax burden on various activities that it starts to limit overall growth; so instead of producing more tax revenue for the state (which should be the idea), they actually produce less.




• The sources that would create more wealth and prosperity; like growing companies, new ideas, innovation, entrepreneurship, are not currently truly supported and are not seen as champions of society; instead they are something that Finland in 2009 over-regulates, inspects, taxes to death, and apparently tries to make sure that no success would be possible.




• There are numerous areas of over-regulation where the jungle of rules and intervening by society is absurd and starts to sound "pretty Kafka".




• Is the role of government to maximize its involvement in everything? Stick its costly and official fingers in every pie it can find? Or should the role of government to let those societal elements more eager to grow, change, prosper and radiate well-being around them to do so freely? Stay out of their way and get involved in as little as possible?

Radical ideas

Idea Number 1

Let's get rid of using "the next elections" as an excuse forever. Here's how we can do it:


Finnish Parliament House.
CC Attribution: Miemo@Flickr

Currently Finland has 200 members in the parliament. They are elected every 4 years for an unlimited number of terms. Changing this naturally would require changing the constitution, but let's ignore that hurdle for now.

200 parliament members can stay. They get elected 100 members at a time every 5 years for a term of 10 years. Nobody can ever get elected for a second term. Ever. No exceptions. The first 100 to go would be selected by their parties (or alternatively: at random) after the constitutional change.

This would create a parliament that has a "junior" group and a "senior" group. The seniors will always head out permanently after their unique and one-time-only term of 10 years. There would be some serious circulation in key posts like Speaker of the parliament, chairmen of different committees etc.

Nobody could ever again use "the next elections are coming" as an excuse, because there would not be re-election, not for them anyways. Also in combination with this unique 10 year term each parliament member would be required to state their objectives and goals in getting things done for each year. This would mean answering: what positive things they want to get done for Finland? What kind of end result they desire to achieve that benefits the nation? Do note that "increasing taxes" is an invalid objective; as it doesn't necessarily lead to anything, and increased taxes can result in less tax-revenue (not more). These would be goals, desired outcomes and true end-objectives, not the means, mechanisms or petty ways of getting there. Strategy, not tactics. Vision, not micro-management.

They would have a scorecard and each year they would be evaluated by an independent party (not answerable to the parliament) on how they did. After the term of 10 years is up the permanently ousted politician would receive a permanent final evaluation on how successfully the objectives were completed in reality: and since this is a unique term, the politician would have a one time chance to get things done, and if that doesn't happen then its going to show on a permanent irrevocable record. Ineffective and useless politicians that get nothing done can currently just "weasel out" the backdoor and there's nothing to really hold them accountable in our society. This would force plenty of things to be transparent and the success of each parliament member would be on permanent public record.

Additionally the scorecards would exists for each political party: the successes and accomplishments of their members would be summed up, evaluated as a group, and published as a permanent public record. This would make the performance and ability to get things done transparent between parties; and I'm sure the most successful ones would increase their fan-base, while those who get nothing done year after year would be weeded out like the useless bladders of hot air that they are - and political groups that can actually contribute to the success of this nation would replace them.



Idea Number 2

Taxes should increase the size of "the pie" for us all. Optimize and maximize the whole; maximum prosperity, maximum well-being, maximum wealth, maximum happiness for us all. Taxes should not crunch and limit the size of "the pie", cut growth, increase complex administration at the price of everything else etc.

So why not instate an all-governing tax law that contains a mechanism that ensures successful taxation?

Here's how we could do it:

Removing any tax would require 50% simple majority in the parliament.

Establishing any new tax would require 2/3 majority.

Every expense, account, cost, etc that is spent by the government to administer, oversee, inspect, analyze, etc any tax would be mandatory to get accounted to every tax in our nation. This would include all imaginable costs: including the costs of the parliament creating a tax, down to the cost of maintaining statistical information related to a tax. All costs would have to be accounted and assigned to all taxes: so we would know at all times exactly how much each of our taxes costs to upkeep and how much tax-revenue it produces.

Creating this report of costs vs tax-revenue per tax would be run every quarter, or alternatively every 6 months. If any tax would be on the red (it costs more to maintain than it produces) for two periods it would automatically get cancelled and nullified forever. The costs associated with it would have to be assigned to burden other taxes; or the officials would need to get rid of them all together.

This way our society would never stubbornly upkeep irrational taxes that produce less than it costs to have them in the first place. Also a public high quality statistic on all taxes made in this manner would open up taxation to more political debate and the bad taxes that clearly don't work would get taken down pretty quick. Exposing the upkeep cost of each tax would also incentivize discovering more efficient ways to keep the system running.

Additional means to chop down bad taxation would include giving the president a strike-option-veto on tax laws. This would mean that the president could approve tax laws only partially. He/she would have the power to overstrike any useless text from the new tax law, and approve only what's left there. If the parliament would not like this, they would always be able to easily cancel the law (with 50% attending majority in a simple vote, on an ordinary day).



Idea Number 3

When something gets created as a law the politicians and officials have a clear objective in mind; "what's this law trying to solve?". When the process rolls onward is there a mechanism that would check in retrospect did the law actually yield the intended result? There isn't. No checks and balances, no followup. Just more laws piling up.

Each law should have an inbuilt set of metrics when it gets created. Surely each time our officials and politicians know for certain why they are creating the law in the first place, right? The objectives should be apparent in each case. Laws are typically there to protect society, citizens, to fix a problem, to accelerate or limit, etc.

Creating a set of metrics for laws should not be all that complicated. Following up on how did the law actually impact those metrics - that's very complicated. However gradually changing the entire system towards this kind of accountability should surface more reliable and realistic objective ways to make this kind of assessments. Perhaps we could indeed check if a law is leading to results it was intended to accomplish.

If a law would successfully reach less than 25% of it's metrics it would get automatically cancelled forever. Written into history as a failed law, and added into the public record of all the politicians who created it - linking the accountability for creating bad laws to the people that decided to pass them anyways. LexKarpela and LexNokia anyone? Who's accountable for those piles of manure?

If a law would fulfill more than 25% of it's metrics, but less than 75% it would automatically go for a second iteration round. The law would re-enter the parliament and it would be obligatory to fine-tune it to be better, and fulfill its set of metrics more successfully.

Also there could be a system that would followup the net effectiveness of laws all the time; and when the world changes (as it so often does, with absolute certainty), the laws that would start to loose their effectiveness would get flagged, become visible, and would get iterated with less resistance to change.

Trust me, Finland does not need laws that don't function as they are intended. Laws that don't produce the desired good outcome for us all. Laws that exists only to complicate, cause problems and slow us all down. There needs to be transparent accountability and scientific validation of the theory that creating laws actually matters and changes things towards the better. We have all the science to do this if we want to, its just a matter of willingness to be accountable and transparent.

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Getting rid of short-sighted politics always waiting for "the next elections". Automatically getting rid of taxes that produce negative results and of laws that don't work as intended would be great. It would open up society to highly develop in its ability to adapt, compete, and cope with the inevitable change. Perhaps even a society that cares more about optimizing the whole, reaching very beneficial goals and ideals - and cares less about the petty politics and things of small importance.

For example: it is far less important that a paper factory worker gets to keep his job stubbornly forever, no matter how much the world has changed around him - and far more important that he is allowed every fair change in society, gets to live a healthy fulfilling life with plenty of opportunities to do something else besides just slack around in a paper factory.

..Perhaps ideas are not quite dead yet. What do you think?

Happy Independence day Finland!

Back in February of 2007 I was invited by the Ministry of Transport and Communications to be the only outside keynote speaker in their yearly main event, "the communications forum 2007". The topics of discussion where about communications policy, new action plans and initiatives etc. Speakers where the Ministry's chief of staff, the minister herself, and me. Audience members where pretty much everyone with an impressive title from the Finnish "who's who in telecommunications and media", all the major CEO's etc. Every major parliamentary group had their chairman there, with plenty of parliament members and high-level officials around.

I was with www.IRC-Galleria.net at that time so I had to speak about something interesting concerning it. I went for a dual topic instead: first using IG as an example of brilliant and changing youth culture in Finland, and then bridging that to copyright, IPR and shared creative culture. I borrowed some stuff from Larry Lessig's excellent talks (and remembered to mention it as an attribution :)) and talked about how the youth view the politicians as "dinosaur old farts and the Taliban of creative culture oppression". The main point was; how much the youth disagree with their view of what creative culture means and has to mean. This issue is a lot more than merely different opinion - it is quite deeply rooted in conceptions about ethics and what is morally right.

Needles to say my key note sparked some controversy there, and I ended up answering the minister's questions on the microphone for about 15 minutes after it. Later there was a panel discussion with all the parliamentary group heads in it - some from the audience asked questions about what's going to be done about copyright in the next (elections where close) parliament, changes were promised, as they always are.

This same issue remains today, burning as ever, and the youth disagree with the politicians about it possibly more than even before. Kids are born with no notion of artificial copyright restrictions, and it is quite natural human behaviour to have a read/write -culture as your standard notion of what culture should be, as opposed to the politicians' view of read-only (with their permission) -culture. The massive failure of DRM with music and movies kind of proves that it's not just youth who disagree - it is almost everybody.

Joi (who's an investor in Dopplr and whom I have had the privilege to work with a bit) posted the Creative Commons new video to his blog.

I wish all the politicians would go and watch this, would get to know CC and the issue, and would start to finally wake up and act towards the right direction:

Attribution: Jesse Dylan @ Creative Commons
Full list of Attributions for stuff used in the video is here.

The video is CC licenced with the "Attribution-Noncommercial-ShareAlike" licence.