Finnish government launches digital economy transformation projects

The Finnish government launches two transformation projects as part of the country’s mission to pioneer a digital economy

Finland has ramped up its ambition to become an international pioneer in the digital economy by 2030, with two key digital economy transformation projects.

The Ministry of Economic Affairs (MEA) has rolled out the Real Time Economy (RTE) project, which is set to run to 2024. The initiative aims to both consolidate Finland’s position at the frontline of global digitisation and use IT to bolster the international competitiveness of indigenous companies in the digital economy.

The MEA-led RTE project, which emerged from Finland’s Sustainable Growth Programme, is being coordinated with the Finnish Patent and Registration Office.

The project, which is backed by private sector organisations, is part-financed by the European Union’s Recovery and Resilience Facility (EU-RRF). The EU has made available €723.8bn in loans (€385.8bn) and grants (€338bn) to EU states for digital-related innovation projects in 2021-2024.

The EU’s implementation of the RRF in 2020 resulted in the Finnish government strengthening investment to support research, development and innovation activities in the 2021 budget. Business Finland, the country’s largest state-run industrial development agency, saw its research and development and innovation budgets rise by €236m to almost €573m in 2021. The increase is directly linked to Finland’s need to match project funding commitments by the EU-RRF in Finland in 2021-2024.

RTE’s primary focus will be to prioritise initiatives that hasten digital transformation and deliver beneficial and transformative societal impacts. In essence, the RTE wants to harness the digital real-time economy to create a system where all business transactions in Finland are based on digital, structured machine-readable information and processing. The template for a well-functioning digital economy is one where all services are online and “communicating with each other”. In this operating model, key business data will move entirely electronically and in real time.

The public-private partnership behind the RTE scheme is critical to driving the project forward, said Ville Kopra, state secretary and chairman of the RTE’s steering group. “The close cooperation between private and public operators is essential for the success of the project and for Finland to become a pioneer in the digital economy.”

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For private sector partners, the Confederation of Finnish Industries, Technology Industries of Finland, Finance Finland, the Federation of Finnish Enterprises and the Association of Finnish Accounting Firms, the RTE project provides a low-risk gateway to engage in state-led programmes that promote digitisation in the real-time economy.

The combination of potential operating efficiencies and savings underscores the advantages for private organisations and enterprises that participate in the RTE project. The uptake of advanced digitisation technologies will enable companies to process business data automatically, making savings in time and capital expenditure as organisations assume greater control over their own data while using that data more effectively in their businesses.

One of the RTE project’s principal objectives is to create the conditions for companies in Finland to optimally move to the real-time digital economy in the most seamless and cost-efficient way. The ability of companies to digitise invoices and receipts, and electronically transfer business information in real-time between different systems, is expected to raise productivity performance.

The substantial partnership of the RTE project is also evidenced in the participation of important state agencies, including the Digital and Population Data Services Agency, Statistics Finland, the Finnish State Treasury and the Finnish Tax Administration.

Far-reaching digitisation targets embedded in the RTE project extend to the Finnish government’s ambition to build the world’s best public administration. Moreover, Finland plans to legislate for new fiscal policy measures that will specifically deploy digital solutions to combat the grey economy. The government also plans to use digitisation to streamline regulations and reduce unnecessary administrative burdens for companies.

Committing to partnerships

For digital change to be realised in Finland, all authorities, companies and financial administration service providers must be committed to the change and commit to taking part in mutually beneficial partnerships, said Kopra. “The work carried out in the RTE project will contribute to building a foundation for developing the digital economy in Finland even further.”

The roll-out of the RTE initiative was quickly followed in November by a government plan to launch a new Digital Compass Project (DCP) in 2022. The scheme will be jointly managed by the ministries of Transport and Communications, Finance and Economic Affairs.

The DCP is largely focused on formulating a shared national vision and targets to achieve substantial digital transformation in the data economy by 2030. It is tasked with developing policy measures governing four chief areas, including skills, building reliable and sustainable digital infrastructures, and securing the digital transformation of businesses and public services.

The emergence of these two projects will reinforce Finland’s commitment to digital transformation for business and society, said Kopra. 

On a European-level, Finland has rowed in behind the European Commission’s (EC) proposal to create a legislative framework to support the development of a European Digital Identity (EDI) and connected wallet application. The EDI is being proposed as a user-friendly digital identification tool for EU citizens, businesses and persons residing in EU states.

The EDI initiative mirrors the Finnish government’s independent plans to develop specific digital identification tools for both businesses and citizens. In Finland, the Ministry of Finance is already providing a digital identity certificate that enables the electronic identification of Finnish citizens by state operated services and agencies across other EU member states.

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