We at Fortum have made great efforts to build and nourish a culture of innovation. It is important to the company that creative thinking and new ideas are encouraged on every level and in every function. We have processes in place to recognise, support and develop innovations from the very first stages into actual commercialised products and services.
We have four goals for our innovation activities:
- to explore and pilot new technologies and business models to create insights into the future;
- to ensure Fortum’s renewal and new growth opportunities to secure our success also in the future;
- to build new significant growth businesses together with our business units or as stand-alone start-ups;
- and to foster a culture of innovation and capabilities for experimentation at Fortum.
When an innovation starts to take shape, the work involved can be organised through an internal start-up. A Growth Board provides funding for the qualifying start-ups. In 2020, we founded Valkea Growth Club to function as an umbrella under which the internal start-ups can cooperate, receive external investments, and grow.
Valkea accelerates in Northern Europe, Valo Ventures in the global arena
Valkea is essentially an accelerator that helps the start-ups operate more in the fashion of external start-ups than like Fortum’s business units. To qualify for funding, the idea must have significant business potential and relevance to Fortum’s strategy. Focus areas include, among others, circular economy, decarbonisation and electrification of industry, flexibility of the energy system and power asset operational excellence. The business needs to be scalable, and digital solutions are preferred over hardware. We have also begun to look into investments in external start-ups to create a balanced but ambitious portfolio.
With eight start-ups currently in its portfolio, Valkea offers support in executing pilot projects, helps develop business strategies and plans, provides trainings in e.g. product development matters and participates in preparing pitches for external investors. The Maria 01 start-up campus in Helsinki, Finland provides a shared inspirational workspace and a sense of community.
Valkea operates in Northern Europe, but not all inventions are born in this area. Valo Ventures is Fortum’s partner for investing in external start-ups on a wider geographical scale. Operating in Silicon Valley in the US, Valo Ventures is a bridge between the global start-up ecosystem supported by international investors and the mostly Nordic innovation circles of Valkea. While Valkea works with companies in their very first stages, Valo Ventures invests in somewhat more developed start-ups. The two collaborate closely and exchange ideas and learnings on a regular basis.
A culture of innovation across all functions
Not all innovation in Fortum is organised into start-ups. We also encourage new ideas with an annual innovation boot camp contest in which anyone at Fortum can share their ideas. The contest usually yields about 150 exciting ideas. The five best ones are developed further in a boot camp and pitched to a jury which consists of Fortum’s top management. The winning idea receives funding and can become a pilot project.
We also have a team dedicated to Innovation & Venturing. The team collaborates with businesses and delves into their challenges, facilitates workshops and finds solutions together. While we find it important to have a unit focused on innovation, we still want all business units and functions to innovate. It doesn’t have to be big, revolutionary ideas – small improvements in everyday work can also end up having a major impact.
What’s all this for?
As for why we are putting such a strong focus on start-ups and innovation: the energy industry is undergoing profound changes as we tackle the global challenge of climate change, and the transformation is picking up speed. As we say in our strategy, we want to drive the transformation. But this means we need to see where we are going – as far ahead as possible. We promote innovation in various ways within the company, but also in the ecosystem in which we operate, through our partners and investments. Cooperation with start-ups and educational institutions is an example of an open innovation approach that Fortum values highly.
Carbon removal marketplace Puro.earth is a good example of successful partnering. We first developed a business idea based on the principles of open innovation. It only took a couple of years for Puro to get going and become a significant brand in the growing carbon removal market. We realised that we need a world-class partner for the scaling stage, so we sold a share of the company to Nasdaq and created a partnership. Today, Puro has a strong impact on the new market of global carbon sink development, and the company has created a completely novel business model to answer immense global demand.
This is what our innovation work is all about: turning wild ideas into business that provides value, not only to its owners and customers but to the entire society.