"The future will see new demands to leverage innovation. We are taking this initiative now to keep our position at the leading edge," says Tobias Öhman, a manager at Vinnova.
Vinnova is Sweden's innovation agency and acts as an enabler for innovation in Sweden. Traditionally, Vinnova's mission has been centred on financing innovation projects, but in order to retain its role in ensuring a competitively strong society and business sector, this mission has been broadened.
"We have realised that we need to act at a system level in order to get stakeholders, innovators and processes to work together more effectively," says Jakob Hellman, at Vinnova.
"For a project to be truly successful, it must be followed through to the end, implemented and shared. One decisive factor in this is the applicable regulatory framework."
Policy labs as a method
This is where smart policy development enters the picture. What this involves, quite simply, is trying to ensure needs-oriented and innovation-friendly development in regulatory frameworks. Accordingly, Vinnova has come up with the idea of policy labs where they can work together with other government agencies, using experimental methods to adapt regulations to society's need for sustainable development. A policy lab can be a temporary measure or a longer term, more permanent initiative, and the focus, goals and methods can vary. Common to all is to base all policy work and changes on those most affected by the regulations.
The idea is that the concerned agency will then continue developing the concept and policy lab methods when working in other areas related to innovation and regulatory frameworks.
These efforts are linked to the UN's 2030 Agendafor a sustainable development.
"Sweden is to be a leader in implementing the agenda, and that means transforming Sweden into a modern, sustainable welfare state from both national and international perspectives. To do this, we need to work differently to today."
This is because innovations and new lifestyles challenge current laws and regulations, as well as the traditional working methods of government agencies and other public bodies. Demands for rules to be changed more speedily and for the public sector to become more transparent and flexible are increasing as society evolves.
"The aim is to develop an agile working method for developing regulatory frameworks which stimulate rather than stifle innovations that push development in the right direction. One important cornerstone of a policy lab is a willingness to experiment with putting the user centre stage."
One risk that Vinnova has witnessed is that public organisations tend to prioritise stability and avoiding mistakes, rather than dare to take the necessary steps to focus on how citizens or companies benefit.
"Here we need Sweden and the public sector to become more adept at creating modern regulations if we are to maintain a strong position in the world market."
Vinnova helps organise, follow up and fund temporary policy labs for other government agencies. The Swedish Tax Agency is one example of a government agency that has worked with Vinnova and established a policy lab. In this case, the overriding problem was trying to understand the market and devise a modern regulatory framework adapted to the sharing economy. In-depth interviews with citizens provided the agency with a number of important insights. These insights were then used as a basis for an in-house workshop in which employees from different departments concentrated on coming up with ideas and developing prototypes. The results included greater understanding for taxpayers, the introduction of new rules and a desire to employ the method in other areas.
Policymaker + reality
Another example is Finansinspektionen (FI), Sweden's financial supervisory authority. In this case, collaborating with Vinnova on a policy lab resulted in a brand-new innovation centre for the finance sector. Before the collaboration, FI and Swedish fintech companies had a somewhat frosty relationship. The industry had sometimes found the authority to be a hindrance to development and innovation. Fortunately, meeting in the policy lab helped to thaw this relationship.
By working with government agencies at policy level, Sweden stands out internationally as many other countries often work at the micro level. This can entail, for example, trying to bring about change in, say, an individual hospital. What Vinnova's project shows is that it is in fact possible to influence the so-called key opinion leaders, the high-ranking civil servants who create our regulations and legislation.
"We bring the policymaker to the real world. One key reason why this works so well is that we involve the stakeholders who can actually get things done. This enables us to effect results on a broader front."