Projects to Transform Finland’s Economy Launched by the Finnish Government

With two major digital economy transformation projects, Finland has increased its intention to become an international leader in the digital economy by 2030. 

The Real-Time Economy (RTE) initiative, which will operate until 2024, was launched by the Ministry of Economic Affairs (MEA). The program intends to strengthen Finland’s position at the forefront of global digitization while also enhancing the international competitiveness of Finnish digital enterprises. 

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

The European Union’s Recovery and Resilience Facility (EU-RRF) is funding part of the project, which is backed by private sector organizations. In the period 2021-2024, the EU has made available €723.8 billion in loans (€385.8 billion) and grants (€338 billion) to EU member states for digital-related innovative initiatives. 

Following the EU’s implementation of the RRF in 2020, the Finnish government increased its investment in research, development, and innovation in the 2021 budget. The funds for research and development and innovation at Business Finland, the country’s largest state-run industrial development agency, increased by €236 million to over €573 million in 2021. The increase is due to Finland’s obligation to match EU-RRF project funding commitments in Finland for the years 2021-2024. 

RTE’s main focus will be on initiatives that accelerate digital transformation while also having positive and transformative societal effects. In essence, the RTE intends to use the digital real-time economy to develop a system in Finland where all commercial transactions are based on digital, structured, machine-readable data and processing. A well-functioning digital economy follows the template of all services being available online and “communicating with one another”. Key business data will be transmitted totally electronically and in real-time under this operating paradigm. 

The RTE project provides a low-risk entry point for private sector partners, such as the Confederation of Finnish Industries, Technology Industries of Finland, Finance Finland, the Federation of Finnish Enterprises, and the Association of Finnish Accounting Firms, to participate in state-led initiatives that promote digitization in the real-time economy. 

The benefits for private organizations and businesses who join in the RTE project are highlighted by the possibility of operating improvements and cost savings. With the use of modern digitization technologies, organizations will be able to process business data automatically, saving time and money while gaining better control over their data and using it more efficiently in their operations. 

One of the main goals of the RTE project is to create the best possible environment for Finnish businesses to transition to the real-time digital economy in the most smooth and cost-effective way possible. Companies’ ability to digitalize invoices and receipts, as well as electronically transfer corporate information in real-time between multiple systems, is predicted to boost efficiency. 

The participation of prominent state organizations such as the Digital and Population Data Services Agency, Statistics Finland, the Finnish State Treasury, and the Finnish Tax Administration demonstrates the RTE project’s significant partnership. 

Digitization on a large scale The RTE project’s goals are aligned with the Finnish government’s goal of creating the best public administration in the world. Finland also intends to introduce new fiscal policy measures to tackle the grey economy, including the use of digital solutions. The government also intends to embrace digitization to simplify regulations and relieve businesses of unneeded administrative costs. 

In order for Finland to achieve digital transformation, all government agencies, businesses, and financial administration service providers must be dedicated to the shift and willing to participate in mutually beneficial partnerships. The work done as part of the RTE project will help to lay the groundwork for the further development of Finland’s digital economy. 

The RTE initiative was shortly followed by a government intention to start a new Digital Compass Project (DCP) in 2022, which was announced in November. The Ministry of Transport and Communications, as well as the ministries of Finance and Economic Affairs, will jointly supervise the scheme. 

The DCP is primarily concerned with developing a common national vision and setting goals for achieving significant digital transformation in the data economy by 2030. It is in charge of formulating policy in four key areas: skills, building dependable and sustainable digital infrastructures and securing the digital transformation of enterprises and government services. 

Finland’s commitment to digital transformation for industry and society will be strengthened by the emergence of these two projects. 

Finland has backed the European Commission’s (EC) proposal to create a legislative framework to facilitate the development of a European Digital Identity (EDI) and associated wallet application at the European level. The EDI is being proposed as an easy-to-use digital identity solution for EU individuals, businesses, and residents. 

The EDI effort is a reflection of the Finnish government’s own aspirations to build specific digital identity solutions for enterprises and residents. The Ministry of Finance in Finland already offers a digital identity certificate that allows state-run institutions and agencies in other EU member states to digitally identify Finnish people. 

Photo Credit : https://www.dhakatribune.com/business/2021/07/15/op-ed-4ir-and-skills-needed-to-succeed-in-a-fast-changing-world