Publicly funded Development FoundationsA Value Creation Circle put into practice

Lukas Wedemeyer

Field of the Best Practice

Development funds founded (partly) by the municipality of Kristiansand

•Competence Development Fund of Southern Norway (SKF)

•Cultiva – The City of Kristiansand Energy Foundation (Cultiva)

Core aims and objectives

Joint overall goal Secure jobs and improve living conditions

SKF instrument Stimulate competence development in Vest-Agder county

Cultiva instrument Stimulate creative environments in Kristiansand

• Group of regional researchers and bureaucrats tried to identifyfuture key drivers of societal and economical development (1994)- Communications- Competence- Culture/arts

• Cost intensive projects primarily controlled by national government

• Defend public funds from short term political influences – local and national

• Securing funds for long term development projects (eternity perspective)

SKF - description

• Public foundation – founded in 2000 by fifteen municipalities in the county• Funds raised from sale of municipalities shares in regional energy company • Real return is award grants (after building buffer)

Purpose• serve the counties inhabitants in the long term• by helping to raise the level of competence in the county• in order to secure and create jobs and good living conditions

Support granted to university level knowledge development by• public or private research/educational institutions• local authorities• public and private enterprises

SKF - description

• yield of -7.5% in 2011 • fund’s investing profile is similar to that of The Government Pension Fund• long term strategy, buffer capital has to be built up before funds are awarded• funds awarded even in years of negative yield fed by buffer

50 %

17 %

9 %

8 %

8 %5 % 3 %

Awards 2001-2010Univiersity and reserach

Living conditions

Experience economy

Processindustry - materialtechnology

ICT/broadband

Maritime and mechatronics

Other

Cultiva - description

• Public foundation – founded in 2000 by the City of Kristiansand• Funds raised from sale of municipalities shares in local energy company• Real return is award grants

Purpose• serve the cities inhabitants in the long term• by fostering innovation, development and capacity building of creative

environments in Kristiansand• in order to secure and create jobs and good living conditions

Support granted to projects aimed at• improving living conditions and creative development of children and juveniles• raising Kristiansand's attractiveness for families• establishment of art-, cultural- and knowledge-institutions

Cultiva - description

• Around same yield as SKF, but • Focused on awarding of sizable fund already in early years• Initially too little focus on buffer capital - no funds awarded in 2012• Change of funding, investment and buffer strategy

60 %

32 %

1 %7 %Awards 2011

Univiersity and reserach (CDC)

Resource Centers & Networks (RCN)

Entrepreneural (EA)

Festivals, conferences

Significant operational details

Value Creation Circle¹

Significant operational details

Triple helix-model

Institutionalized triple helix-model

Foundations

People

Public admin.

Used funding

- The City of Kristiansand sold parts of its shares in the local energy company

- As a result of strategical considerations by bureaucrats and researchers the profit was donated to the two foundations (Cultiva & SKF)

- The foundations invested it in shares, obligations or property (modeled on the Norwegian pension fund)

- The real return is after building a buffer used to award yearly grants (2-3 M€/y)

Transferable elements

Preventing funds from absorption by day-to-day politics - donation to foundation - eternity perspective stipulated in statutes

Very farsighted underlying overall goal – different instrument to reach those –development strategy adaptable to changing societal chalanges

Actively foster triple-helix structures – through the foundations evaluation criteria• Business potential• Societal added value• Contribution to regional R&D or Competence Development Centers• Internationalization• Integration• Entrepreneurship & innovation• Network building• Co-financing• Additionality

Innovative elements

• Publicly funded Foundations

• Advocacy not for individual interests but for the public interest

• Comissioned research for the corporate good not the good of corporations

• Implementation of tripple helix methodology in foundations awarding praxis

• Fostering self-fertilizing circle of value creation

Evidence of successInstitutionalKilden – Theatre- and concerthouse Noroff – University college

Projectscountless projects funded over the last 10 years by both foundations~20 per year per foundation CSI Heidelberg calculated SROI far beyond 1 (1,7-2,2) for SKFs investments

Contact data

For more information please contact:Lukas Wedemeyer, lw@kristiansand.kommune.no, +47 907 31 476

Competence Development Fund of Southern Norwaywww.kompetansefond.no/english

Cultiva – The City of Kristiansand Energy Foundationwww.cultiva.no/english