There is a growing divide between cities that has led to highly dissimilar regional needs, and calls for a strong urban policy based on genuine partnership and interaction. In order to foster vitality and competitiveness in urban regions across the country, new urban policy should focus on more equitable distribution of growth. No two regions or cities are the same, which is why they need different, customised measures.

Cities drive growth. But forecasts predict a decline in the number of working age population. This trend will have a major impact on the availability of workforce, which in turn will determine the development opportunities for businesses across the country. What attracts international and domestic companies is growth and innovation, as well as good conditions for doing business, including digital and physical infrastructure. 

Cities drive growth

To ensure growth, all development efforts should start from recognising and acknowledging the fact that all regions and cities are different, and each have their own, unique strengths. Regional strengths should be exploited to achieve a high employment rate. 

Urban policy is a relatively new concept in Finland. It emerged in the mid-1990s when the first urban policy committee was established. Around the same time, the first urban forum was organised in Turku, bringing together a large group of specialists from different fields to discuss approaches to urban development. 

This first stage of urban policy, which went on until the 2010s, could be described as a time of programme policy. Programmes prepared at the time included the regional development programme, cohesion and competitiveness programme, and centre of excellence programme. 

Launched in spring 2006, the municipal and service structure reform (the PARAS project) introduced urban land use planning, along with agreements concerning land use, housing and transport for the regions of Helsinki, Turku, Tampere and Oulu. In Finland’s urban policy, the period from those years to present day could be described as the period of agreements, as the agreements concerning land use, housing and transport (MAL) were followed by growth agreements and bridge agreements. 

The agreements will continue to represent one of the key urban policy instruments

The experiences gained from these agreements have been positive. The agreements will continue to represent one of the key urban policy instruments, and attention should be paid to their assessment and further development. Policies built on agreements have laid a foundation for a new partnership between cities and the State. 

In their individual agendas for the Government Programme, cities identify as one of their key objectives a long-term partnership based on equality and direct interaction. The Finnish government shares this objective. 

To build a stronger and more effective partnership, it is important for the central government to tighten cooperation between the ministries and the policy sectors. This will also help government present a more united and coherent front vis-à-vis the cities. At the same time, the central government and the cities should together explore the structures of cooperation required for urban policy, the best shared practices and the themes to be pursued. Steps must also be taken to ensure the formulation and assessment of a more consistent, long-term urban policy. 

Finnish urban policy is about to enter a new era. It is time to move from the agreement-based model to the next stage: an era of equal partnership. The partnership between cities and the State must be interactive, mindful and more proactive. 

The goal of this partnership is to establish a common ground and to build processes together. 

Katja Palonen, Ministerial Adviser, Ministry of Economic Affairs and Employment