Green transition — the potential for change?

Lähikuva huurteessa olevista kasveista, jonka taustalla on järvimaisema.

Change starts from awareness and intention

In recent years, the importance of diversity has increasingly been studied in a context of profitability, competitiveness and value creation. Diversity is required, as it makes for better results. Social values ​​such as equality or social justice act as diversity drivers, but in addition, the companies employing these policies have also begun to take an interest in inclusion and diversity as a source of competitive advantage and thus as an enabler of growth. Diversity seems to create a better society, but also more competitive business operations. If knowledge of the winning equation has increased, however, progress has been slow.

A ‘get together’ was organised, at the beginning of November in Tampere, in the context of the ‘Geography Days’. Our AGDA project, funded by the Nordic Equality Fund, invited researchers and experts to a Timeout Dialogue on diversity and innovation. The intention was to discuss the relationship between diversity, equality and innovation activities. In this blog, we summarise some of the key findings of that discussion day.

Innovation beyond technology buzz

The general understanding of innovation in the Finnish society still remains technology-focused. Innovation should better be understood more broadly, e.g. as neither exclusively nor primarily related to technology, but as also taking social innovation into account and, at its simplest, as making everyday life easier (including, for instance, new energy sources or circular economy solutions, from drying cabinets to textile patches).

Often, however, such practical innovations do not gain attention in the same way as those whose development involves more investment and money. As such, the care sector or other traditionally female-dominated fields do not, for instance, receive sufficient attention from men. In addition to gender, the diversity of innovation activity, in Finland in general, remains undeveloped because other minorities are neither heard nor seen in the processes of policy development and funding.

We also often talk about the need for ‘international talent’, ignoring the fact that we already have a diverse pool of talent and know-how in the people already here who come from many different cultural backgrounds. Their views are routinely excluded in our overly elitist innovation activities and policies.

Women not worth the risk?

The acquisition of financing for the development of innovations is one of the main gendered practices that excludes or limits women’s innovation potential. When looking at the investments of venture capitalists – the risk financing of companies – the picture is startlingly gendered. Unconventional Ventures have compiled valuable information on the issue for four consecutive years (See funding report) on the issues of venture capital in innovation in the various Nordic markets. The starting point for this work was that too many ideas remain underdeveloped and overlooked because they are not in the mainstream or do not conform to the ideal type of venture capital and innovation development. Many innovations are after all found in unconventional combinations or unexpected meetings.

According to the UV report, the field is incredibly gendered. Across Europe, a minimum of 85 percent of VC funding is allocated to companies founded and managed by men. In the Nordic countries, 1% of this funding goes to Nordic female founders. In Finland, capital is allocated to mixed and female founding teams more than average: a total of 14.2% and 2.4% respectively. Ethnic minorities, moreover, face double barriers and as such their funding is minimal.

Even if we allow for the need to look for explanatory factors from numerous directions (weakness of risk-taking culture, cultural factors in study and work choices, etc.,) it is clear that diversity is not being realised. The financial field is highly gendered and in consequence, significant innovation potential remains untapped. The criteria for the allocation of funding should clearly be re-evaluated.

Value- or norm-based development?

In the context of the choices made in the private sector, the marginal conditions of the economy and growth expectations seem to reduce the innovation perspective. But this is also the case in the public sector. Currently, new innovations mostly benefit already advantaged groups and segments of the population. (See for instance Policy brief 2/2022. Business Finland & Vaasa University.) Due to this imbalance, significant potential for innovations to make a difference in terms of social justice or other opportunities for societal renewal, remain underdeveloped.

Value-based management has meant directing investments to those sectors and companies that create the most ‘added value’, as well as using the financing with the highest ROI (return on investment) in business operations. Focusing on economic ‘added value’ generally means that the social ‘value added’ is not realised. It may also be the case that even part of the added value remains unrealised when focusing on developing innovations guided by a limited technological and financial perspective.

Norm-based public policy development is about the rules of the game, legislative choices and priorities that guide business activities, as well as research and development activities and their funding. In public sector financing, certain rules and norms have been set in respect of equality. One can also consider whether the rate of social change is increasing to the extent that it can be considered a fundamental change where a radical transition is required. For example, many reforms related to the green transition and a significant reassessment of energy policy contain the possibility of radical change, a change that would entail not merely gradual, small-scale improvement, or iterative development, but rather an outright revolution.

From green transition to triple transition?

Few things have been talked about more than the green transition on the European political agenda in recent years. Along with the green transition, digital solutions have also been brought up in some discussions, referred to as twin transiition (Towards a green and digital future – Key requirements for successful twin transitions in the European Union). In the AGDA project we pose a question of whether the twin transition could be followied by a triple transition, where green and digital are accompanied by a transitio, where social sustainability and participation also count, i.e. a transition where diversity is in focus.

In its analysis, the Friedrich-Ebert-Stiftung study A Feminist European Green deal 2021, published in March 2022, highlighted concrete ideas and proposals in five policy areas. The idea was to identify areas where the EU could become an even more significant player in global politics by shifting to a more feminist policy stance. The report used an eco-feminist methodology to identify gaps and development needs in three key areas of European green development policy: energy, transport and agriculture. One of the key conclusions from this analysis was that from the point of view of these key areas of green transition, the opportunities for change have not yet been seized. One of the key reasons for this is that most of the new EU strategies and laws guiding future activities and choices are either completely gender-blind or not sufficiently based on gender analysis.

We continue to lack the knowledge to make diversity a force for change. But we already know that we need better and more consistent information about this. The report called for a reformulation of the EU’s green growth strategy which would abandon the priority of GDP growth and set as its goal a new economic model that would be measured by its ecological and social achievements. In such a triple transition, innovations could also be redefined and, for example, the unpaid and systematically underpaid nursing work done by women could be examined in all its diversity. This reassessment could also give men a more diverse role and the opportunity to become agents of social innovation.

You cannot expect change and remain in your comfort zone (paraphrasing Bell Hooks)

One of the key takeaways from our Timeout dialogue was that change is necessary, but that it will not be easy. You cannot achieve change by remaining comfortable, or by letting others do so either. The participants also directly challenged the AGDA project and its researchers. In our research, we must attempt to move beyond the confines of RDI funding practices, its mapping and design thus exposing AGDA to a critical and more diverse examination, outside the mutual ‘safe space’ enjoyed by researchers and experts. Maybe we’ll meet you on that field?

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