Nordic governments have reached a landmark agreement to build a common digital ecosystem to drive the global competitiveness of the region’s small to medium-sized enterprises (SMEs).
A five-year deal, which brings about unprecedented Nordic collaboration in the technology sphere, will help SMEs implement more cost-efficient digital systems in core areas of finance management and corporate administration.
The ecosystem project is being administered by Copenhagen-headquartered Nordic Smart Government (NSG), a partnership led by state-run trade registers in Sweden, Finland, Norway and Denmark. The group also includes national tax offices, patent and registration agencies and treasury departments, as well as private sector business organisations.
Significantly, leading private Nordic organisations, including Skandinaviska Enskilda Banken (SEB), are joining the NSG partnership. In February, SEB became the first Nordic bank to collaborate with the NSG.
The projected gains in lightening the administrative workload for companies, combined with the sharing of standardised real-time data, were factors behind SEB’s decision to sign up to the partnership, said Stefan Stignäs, head of corporate markets at SEB.
“We see a clear need for the financial sector to participate in the NSG partnership,” he said. “Other Nordic banks should become involved in this collaboration. It represents a valuable complement to the joint bank initiatives for the P27 Nordic payments platform and a uniform Nordic know your customer infrastructure.”
The NSG ecosystem project’s primary vision is to build a data-driven region, where data and digitisation generate value by sharing data in an automatic, intelligent and secure manner.
While the clear politically defined vision is to make the Nordics the most integrated and sustainable region in the world by 2030, the anticipated spin-off value for Nordic SMEs includes increased competitiveness through digitisation and the reinforcement of cross-border initiatives to establish a digital single market across the region.
The “integrated region” goal is an increasingly relevant and important factor in trade and cooperation between the Nordic economies. In 2019, inter-Nordic trade accounted for about 20% of each country’s exports.
Read more about pan-Nordic tech collaboration
- Six regional banks sign shareholders’ agreements, agree business plan and make financial commitments to payments platform.
- Nordic know your customer joint venture will create a common Nordic platform based on data management technologies.
- Universities and technology businesses in Nordic countries are working cross-border as part of two pan-Nordic organisations.
The project aims to benefit Nordic SMEs by enabling business data to flow safely and automatically in real time from enterprise to enterprise and from enterprise to government authorities. In essence, this means aligning the digital infrastructure between businesses, service partners and authorities to simplify the day-to-day operations of Nordic businesses.
A fundamental in the project’s mission is to promote better use of business data by SMEs within a shared real-time economy across the Nordic countries. The NSG also sees the digitisation of financial administration as helping SMEs to simplify and reduce their administrative costs and processes.
Calculated on figures from global consultants Ernst & Young, the NSG says the monetary value of a common digital ecosystem could exceed €26.8bn after 2027. The substantial prospective business-to-business gains from the project have become a driving force for Nordic governments to leverage this potential.
According to NSG estimates, based on the future launch of new products and optimised services linked to real-time business data, gains accruing in the phased introduction of the project could deliver €14bn in value annually for Nordic SMEs by 2027.
A project roadmap was given the green light by Nordic industry and economy ministers in September. One NSG estimate suggests that the two million Nordic SMEs, which comprise 90% of all enterprises, could save up to €500m by 2025 if they make use of electronic business data and financial administration services.
The intensity of the cross-border collaborative element between Nordic governments is a vital component in driving the project forward, said Franck Mertens, project director at the Finnish Patent and Registration Office (Patentti ja Rekisterihallitus). “Under the real-time economy roadmap plan, we expect SMEs will be able to begin using electronic business verifications in the coming years,” he said.
The targets built into the roadmap foresee the broad use of electronic business verification, including e-receipts, by SMEs. It is also envisaged that data-sharing services and systems will be interconnected by open and standardised interfaces, while new private and public services using electronic business data will be created for SMEs.
Partners in the NSG, including the ministries of industry and economy in each country, are currently increasing their collaboration to create and implement digital-based data-sharing systems in line with the project’s roadmap. This will open up innovation-led opportunities to develop new services in close cooperation with businesses and connected organisations.
Huge financial benefits
The ability of Nordic SMEs to operate reporting and credit information systems in real time offers them the potential for huge financial benefits and savings, said Annika Stenberg, director general of the Swedish Companies Registration Office (Bolagsverket).
“Nordic Smart Government brings an innovative approach to dissemination of information by companies,” she said. “By having complete control over their data, they can share it in real time and significantly reduce their administrative workload and reporting.”
More easily accessible and high-quality data will also contribute to creating growth and new business opportunities, added Stenberg. “On a pan-Nordic level, we are creating completely new solutions and real benefits for businesses and society as a whole.”
The NSG’s vision of creating an “integrated region” will require an exceptional degree of cross-border collaboration between Nordic governments and the partnership’s other members. To achieve the project’s innovation and growth targets, governments aim to reduce existing legal bottlenecks and technical barriers within the Nordics and between businesses.
Similarly, meeting the expectations embedded in the project will require the Nordic countries to develop common positions and regulations on the fair use of business data as part of a joint initiative to create a more coherent digital development path.
To propel the project forward, regional governments plan to establish a public-private advisory board to support the implementation of the NSG roadmap in 2021. The roadmap envisions that 70% of Nordic SMEs will be able to use a digital business system in 2022, and by 2023, the NSG expects SMEs will be able to freely move their data between business systems, enabling them to handle sales and purchases digitally across the Nordic region.
The NSG plan also foresees 80% of Nordic business systems using a common application programming interface (API) that will allow pre-approved service providers to access SMEs’ data. The roadmap also presupposes that 80% of business-to-business invoices forwarded within the Nordics in 2024 will be digital.