Entrenched procurement culture erodes the public sector's ability to innovate and weakens the domestic IT sector's growth opportunities. Based on my experience, public procurement is designed to ensure nothing changes, and the result is systems that primarily serve the margins of large foreign consultancies — not users, employees, or taxpayers.

I worked in Finnish public sector IT from 2015 to 2023, and I've seen up close how public IT procurement fails to serve its users. When you dig deeper, the problem isn't in individual choices but in a structure that makes renewal practically impossible.

Caution always wins, and innovation is feared

In Finland, procurements are done so that no one can complain. Tender requests are massive documents of hundreds of pages, where the core isn't the best solution but the best process.

Points are given for long reference lists. Points for organization size. But not for solving the problem better and more efficiently.

Innovative procurement methods are used in only 3–5% of purchases in Finland.

When you play it safe, the result is exactly that: seemingly safe, but underneath the surface an inefficient, hard-to-use solution.

In-house companies lock SMBs out of the market

Istekki, Tiera, 2M-IT, Sarastia and others were established to simplify procurement, but the result is the opposite: the market concentrates on them, and through them to large international vendors. In-house companies can sell to their owners without competitive bidding. At the same time, their own product development is limited.

In practice, they buy services from large global corporations, act as gatekeepers between SMBs and clients — and prevent Finnish companies from accessing public sector organizations.

The direct consequences: Finnish SMBs are left with a vanishingly small role, expertise flows abroad, and price tags grow due to intermediaries.

Mega-projects kill competition at the starting line

Procurement law would allow modular, small-part procurements. But in practice, "end-to-end" mega-projects are preferred, which only a handful of large vendors can even bid on. When no competition emerges, neither do alternative solutions, iterative development, rapid experiments — nor SMB growth paths.

This is the complete opposite model from Denmark or Estonia, which are at the forefront of the EU's digital economy.

Risk avoidance leads to outsourcing expertise

The "safe name" is chosen because a mistake is a political risk. The same logic guides everything: buy from large consultancies, buy from foreign cloud platforms, outsource services as complete packages.

This erodes domestic capability year after year — and when the public sector doesn't utilize domestic IT expertise, digital skills deteriorate and growth shifts abroad.

Result: Finland can't build exportable public sector digital solutions

Domestic SMBs don't get public sector references. Without references, there's no export. Without export, there's no growth. Meanwhile, Denmark and Estonia have built models where the public sector serves as an innovation platform: SMBs can participate in competitions, solutions are piloted quickly, open APIs open markets, and government procurements create exportable references.

Finland does the opposite.

What should be done?

This isn't a technical problem. This isn't a legislative problem. This is a problem of attitude and structural direction. If we want public IT to create value rather than prevent development, we need:

Five changes

Splitting — procurements into smaller parts that more companies can participate in

Experiments — room for proof-of-concept pilots before massive orders

SMB access to the table — reasonable reference requirements

In-house companies as coordinators — not market gatekeepers

Outcomes over process — evaluate functionality, not document thickness

This isn't a radical idea on any level — it's how Denmark and Estonia build their digital services. The results speak for themselves.

Conclusion

If we continue on the current path, we'll gradually lose our IT sector's competitiveness. But if we dare to change the established practices that serve only a vanishingly small group, we could build a Finland that doesn't just buy technology — but also creates it.

Public sector IT procurement isn't just a technical investment — it's a political choice about the future of domestic IT expertise.