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Born Digital: Solution Area C

Summary

All Nordic countries have digital services for business events, but national digital IDs are required to access these services. The NSG&B working group completed a pilot  where two countries accepted each other’s national IDs for the logon.
Case Nordic Smart Government & Business: enabling cross-border company data sharing in the Nordics using dataspaces, Virtual Finland, 2023 – see appendix
 However, with the introduction of the EU’s eIDAS2,
The EU regulation 910/2014, known as eIDAS Regulation (“electronic Identification, Authentication, and trust Services”), is a European regulatory framework that establishes a set of rules and standards for electronic identification and trust services in the member countries of the European Union.
 which promises a unified digital identity solution across EU countries, further rollout of the cross-border login solution was halted. eIDAS2 is expected to address key digital capabilities, such as cross-border identities and data sharing.
A significant insight from the work within Born Digital is that the digitalisation and distribution of events are crucial for the digital ecosystem. Sharing company events enables automated processes, reducing the need for SMEs to manually navigate requirements. Instead, requirements can be met through the automated interactions initiated by triggering events, with users performing actions within their preferred digital workspaces. In 2024 Norwegian Tax Administration did an experimentation on this concept, which implements this new type of interaction.
This chapter details the challenges and work done in the following areas and outlines the work done in the following areas: 1) Born Digital Maturity Survey; 2) Born Digital Process Model, 3) Digital capabilities, 4) Virtual Finland experimentation, and finally the status on the automatic notification of events in the 5) Born Digital concept experimentation.

Background

SMEs face challenges both in understanding their obligations towards public authorities and also how to comply with them efficiently. SMEs should have access to digital services that help them identify and comply with the legal requirements. Born Digital implies that SMEs will have the appropriate digital capabilities from the start.
Starting digitally reduces the administrative burdens for SMEs and eliminates the need to transition later. The digital setup should involve all stakeholders, including business registries, tax authorities, banks and sector-specific regulators. The ecosystem should facilitate efficiency and consistency through information reuse.

Reflections on the scenario from Implementation Plan 2021

In the NSG&B Implementation Plan from 2021, the following expectations were set for the Born Digital working group:
  • “SMEs can be established and registered digitally in one coherent process where the companies receive guidance regarding the requirements for the businesses to be compliant. The SMEs also receive confirmation that they have fulfilled the different steps identified throughout the start-up and registration process and are ready to go into operations.”
  • “The result of the registration process is a digital company, with all the relevant capabilities available to benefit from the NSG ecosystem, i.e. sending and receiving digital business documents, access to product information, Open Accounting mechanisms for easy and secure sharing of data etc.”
A fully digital process for company establishment and registration helps guide SMEs through compliance requirements based on their industry. This is outlined in the NSG&B Implementation Plan 2021, which expects SMEs to establish and register digitally in a coherent process, receiving guidance and confirmation of compliance steps.
The Born Digital working group explored achieving this digital foundation, which supports SMEs throughout their lifecycle, facilitating interaction with public and private entities.
Key elements identified for a digital SME ecosystem include:
  • Portal Services: Platforms like AltInn.no, Verksamt.se, Virk.dk, Suomi.fi and Island.is facilitate communication with the authorities but need better coordination and unified processes.
  • Interoperability: APIs for government and private services, like Norway’s company registration interfaces, allow the integration of services such as banking and accounting. The PSD2 EU directive also supports this by enabling banking data sharing. There are similar APIs under development and in early phases in the other Nordic Countries.
  • Regulations: Mandates for digital systems, such as Denmark’s bookkeeping law,
     require businesses with significant sales to use approved digital systems. Norway enforces digital reporting, but Sweden, Finland and Iceland currently do not have a regulation that mandates the use of digital business systems.
  • Digital Event Sharing: Event-driven ecosystems allow businesses to respond to relevant events. Norway, Sweden and Denmark are developing national infrastructures for sharing events.
  • Secure Digital Identification: eIDAS2 regulation will enhance digital IDs and verifiable credentials, enabling secure, consent-based information sharing. Nordic countries are preparing for these capabilities, although current national IDs lack cross-border functionality.
Ongoing efforts in Nordic cooperation and EU regulations aim to create interoperable digital capabilities, benefitting SMEs and enhancing the region’s digital maturity.

NSG&B contribution in the field

The Born Digital working group demonstrated that starting a company digitally in one Nordic country while based in another is possible with cross-border digital trust services, but further exploration is deferred in anticipation of eIDAS2.
The group experimented with automated interactions based on company events, aiming for authorities to proactively engage with businesses. They also explored communication through existing business workspaces like accounting and banking systems.
The areas explored by the working group include are on a high level described below with challenges and contributions:

1. Challenge of Born Digital Maturity Survey:

Challenge:

A survey was conducted in 2021–2022 as one of the first deliveries to gain insights into the digitalisation level of Nordic SMEs. The purpose was to have a better understanding of the business and market level of digitalisation as well as the corresponding needs and requirements set for government digital services in the Born Digital area, also the results of the survey was used to evaluate the possibilities to improve cross border serviced. The following challenges were identified:
  • Scope and Purpose: Understanding the digitalisation level of Nordic SMEs to determine the most important tasks for the Born Digital area.
  • Assessment of Digital Maturity: Evaluating registration processes, legal frameworks, technical infrastructure and willingness to digitise among key stakeholders.
  • Execution Method: Conducting the survey primarily as a desktop exercise, validated with inputs from system vendors, accountants, auditors and other stakeholders.
  • Content Determination: Agreeing on relevant areas to include in the survey and creating a template.
  • Completion Process: Team members from each country completed the survey using existing documentation and by reaching out to the relevant organisations.
  • Paper-Based Registration: Although rarely used, paper-based registration is still accepted in all Nordic countries.
  • Cross-Border Digital IDs: The lack of approved cross-border digital IDs hinders fully digital business processes across Nordic borders, forcing manual processes, e.g. sending PDFs.

Contribution:

The following contribution was delivered in this area:
    • Survey Execution: Gained insights into digitalisation on the level of Nordic SMEs and that they are willing and able to use digital services.
    • Insights Provided: The results used to evaluate the possibilities of improving cross-border services and understanding the digital maturity of each country, compiled and grouped by country (Denmark, Finland, Iceland, Norway and Sweden), showing a high level of digitalisation among Nordic SMEs.
    • Digital Business Registration: All countries offer digital business registration by default through national gateways.
    • Data Exchange: Norway and Sweden offer APIs for data exchange relevant to registration.
    • Trusted National eIDs: National gateways are accessible with trusted national eIDs.
    • Data Sharing and Collaboration: Data from registries is shared with companies, citizens and public authorities through APIs and look-up services. The similarities among Nordic countries provide a strong basis for cross-border collaboration on business registration.

    2. Challenge of Born Digital Process Model:

    Challenge:

    All Nordic countries, with the possible exception of Iceland, have models for the company lifecycle as well as activities and services for supporting companies in their lifecycle stage. The main focus of the work has been the establishing phase, but other stages in the company’s life cycle are still relevant. The challenges found based on this are:
    • Establishing Phase Focus: The main focus has been on the establishment phase, but other stages in the company’s life cycle also need digital infrastructure and services.
    • Lack of Integration: Existing digital services across the Nordic countries are not part of an integrated process and often require manual processes, lacking the reuse of information.
    • Support for Dissolution: Digital support for dissolving companies is almost non-existent, except for some guidance.

    Contribution:

    The following contribution was delivered in this area:
    • The Lifecycle Models: The Born Digital Process Model defines the need for digital infrastructure and services throughout the company lifecycle based on national models.
    • Exploration Phase: Identified the main concerns and digital service needs during the exploration phase, including public and private sector services.
    • Establishment Phase: Defined the necessary digital services and infrastructure for formalising a new company, involving public and private sector touchpoints.
    • Running Phase: Highlighted the digital services supporting the operation of a registered company, including transaction processing, invoicing and reporting.
    • Dissolution Phase: Identified the digital services needed for ending a company’s operations, including public and private sector support for bankruptcy and record archiving.
    • Holistic View: Emphasised the benefit of digitalisation every step of a business’s life cycle, providing a comprehensive approach to digital infrastructure and services.

    3. Challenges of Digital capabilities:

    Challenge:

    On the basis of stakeholders’ meetings and input from national experts, the work group has identified and prioritised a set of challenges and digital capabilities that an SME should have in order to get the benefits of being a part of a national and Nordic digital ecosystem. They are:
    • Identification and Prioritisation: Determining and prioritising the digital capabilities necessary for SMEs to benefit from the national and Nordic digital ecosystem.
    • Provision of Capabilities: Balancing the provision of these capabilities between public infrastructure and services, and private services and solutions.
    • Integration of Business Events: Understanding the importance of digital sharing of business events as a key enabler for ecosystem interaction.
    • Adapting to New Regulations: The initial work on digital capabilities was done without knowledge of the upcoming eIDAS2 regulation, which addresses many identified capabilities.

    Contribution:

    The following contribution was delivered in this area:
    • Key Digital Capabilities: Identified essential digital capabilities for SMEs, including digital and structured company information, accounting data, secure digital identities and compliance verification.
    • Digital Sharing of Business Events: Recognised the potential of publicly sharing business events to enable required actions within the ecosystem.
    • Impact of eIDAS2: Acknowledged that the eIDAS2 regulation will address several identified capabilities, emphasising its importance for future digital infrastructure and business scenarios.

    4. Challenges of Virtual Finland experimentation:

    Challenge:

    Born Digital teamed up with the Virtual Finland project
    See more information on the Virtual Finland website - www.thevirtualfinland.fi/en/frontpage
     to perform an experiment on how to digitally register a company across borders. The purpose of this experimentation was twofold:
    1. Make a digital solution for ensuring that a citizen in one Nordic country could be able to establish a company in another country in a remote, digital and secure manner.
    2. To make company information available cross border in the Nordics.
    The experiment also identified the following challenges:
      • Cross-Border Registration: Company registration processes become paper-based when registering from a different Nordic country, making cross-border digital registration challenging.
      • Data Sharing: Ensuring that company information is available across borders in a secure and digital manner.
      • Interoperability: Identifying and standardising key business data for interoperability across different Nordic countries.
      • Feasibility of Data Consenting: Testing data consenting mechanisms, which require further development to be practical for future use.
      • Lack of Integrated Services: Absence of a unified portal or service entity that supports multiple national and regional authorities as well as private operators for company establishment.
      • Mutual ID Recognition: Ensuring that national digital IDs can be accepted cross-border for logging into digital services.

      Contribution:

      The following contribution was delivered in this area:
      • Digital Solution for Cross-Border Registration: Developed a digital solution allowing citizens to establish a company in another Nordic country remotely, securely and digitally.
      • Prototype Implementation: Conducted an experiment on cross-border company data sharing involving Finland, Norway, Sweden and Iceland.
      • Standardisation of Business Data: Identified and standardised key business data (e.g. company business extract, beneficial owners, signatory rights) for better interoperability.
      • Data Productisation and Dataspace: Demonstrated that business data can be easily shared from its original source using data productisation and a dataspace, paving the way for future self-sovereign and wallet-based solutions.
      • Pilot for Mutual ID Recognition: Successfully completed a pilot where two countries accepted each other’s national IDs for logging into digital services.
      • Findings on Similarities: Showed that Nordic information requirements and processes are similar enough to allow information sharing and reuse across borders in dataspaces with standardised data products.

      5. Challenges of Born Digital Experimentation:

      Challenge:

      The Born Digital work group has focused on creating a more user-friendly start-up process that will create compliant and digitally enabled SMEs. There is room for radical improvement of how companies are handled by the public and private sector if we change the interaction patterns between the companies and their environment and the following challenges has been identified in this process as:
        • Complexity in Starting a Business: Navigating the complex web of public requirements, leading to insecurity about compliance and deterring business startups.
        • Current Interaction Patterns: Businesses must search for the right authorities, applicable regulations and correct forms, creating administrative burdens.
        • Responsibility Perception: Changing the perception that companies alone are responsible for understanding and acting on their responsibilities.
        • Cross-Border Registration: Ensuring a digital solution that allows a citizen in one Nordic country to establish a company in another country securely and remotely.
        • Unified Digital Infrastructure: Creating a common infrastructure for interaction and data sharing that supports the whole company lifecycle.
        • Implementation in One Country: Deciding to experiment in Norway using AltInn as a hub for communication and event sharing.

        Contribution:

        The following contribution was delivered in this area:
        • Proactive Authority Engagement: Proposed a model where authorities approach businesses based on business events, ensuring “compliance by default”.
        • Experimentation in Norway: Created and tested a conceptual model in Norway using AltInn v3 for event sharing and digital dialogues.
        • Event-Driven Architecture: Utilised event-driven architecture to enable efficient interaction between authorities and businesses.
        • Assurance of Compliance: Provided businesses with assurance that they comply with the requirements by submitting correct and complete information.
        • Reduced Administrative Burdens: Aimed to reduce administrative burdens and achieve more efficient interaction between authorities and businesses.
        • Public and Private Collaboration: Involved multiple public and private actors in the experiment, including Tax Administration, Brønnøysund Register Centre, Digitalisation Directorate and various banks.
        • Ongoing Projects: Identified ongoing and planned projects to continue the work if the experiment is successful.
        • International Interest: Expected the outcomes to be of interest and value beyond the Nordics, contributing to the development of government services globally.
        • Similar Initiatives in Other Nordic Countries: Highlighted similar projects in Denmark and Sweden, with Sweden using third-party providers to assist in business establishment while complying with the national and local laws and regulations.

        Conclusion

        The work on the “Born Digital”' solution for the public sector’s digital services to SMEs has progressed from conceptual exploration to developing a practical model aimed at creating a well-functioning digital ecosystem for SMEs. The primary focus has been on digitalisation and automating core business processes to simplify the lives of SMEs. Through these efforts, the working group has transitioned from high-level considerations to a working model, which has been validated through experimentation in Norway and the Virtual Finland experimentation.
        The model is based on the following assumptions:
          • Both public and private entities participate in a common digital ecosystem that shares events, information and services, enabling process automation.
          • All companies possess a minimal set of digital capabilities.
          • The digital infrastructure supports event-driven services that proactively engage with SMEs, ensuring seamless and timely interactions.
          • Services are designed with a life-cycle perspective, supporting SMEs through all stages of their business journey.
          By adhering to these principles, a digital environment can be created where SMEs can thrive, benefitting from automated, efficient and user-friendly processes that reduce administrative burdens and enhance compliance.
          This model can facilitate achieving the initial scenario in this area that was set up in 2021 for the NSG&B Implementation Plan of SMEs being able to be established and registered in one coherent digital process, including guidance on compliance, and having SMEs that are fully digital with automated business administration processes.
          Table 4: Overview of deliverables from the NSG&B working group on Born Digital: purpose & result, impact and next step.
          Deliverable
          Purpose & result
          Impact for businesses
          Next step/​future work
          1) Maturity survey
          Survey results of digital maturity of Nordic countries
          See appendix
          Create a common understanding of a common starting point and the national differences
          Understanding their current situation helps agencies develop relevant services
          Used in subsequent work
          2) Process model
          Process model
          See appendix
          Understand what types of digital services are relevant based on the company life-cycle stage
          Enables better services for companies
          Support more areas of the company life-cycle
          3) Digital capabilities
          Description of digital capabilities of Nordic countries
          See appendix
          Define the capabilities needed and how to achieve them
          Support for new and better services
          Implement the components needed to support the capabilities, e.g. eIDAS2
          4) Virtual Finland experimentation
          Report on the Virtual Finland experimentation
          See appendix
          Demonstrate how cross-border digital processes can be implemented
          Better support for cross-border activities
          Implementing the relevant EU regulations and directives
          5) Born Digital experimentation
          Report + working prototype
          See appendix
          Validate that a new interaction patterns are viable and provides the assumed benefits
          Peace of mind and less administrative burden
          Go from experimentation to the actual implementation

          Perspectives for continued cooperation

          There are several key areas where continued collaboration could be highly beneficial:
          • Refining and Implementing the Model: Expanding the validated model from the Norwegian experimentation to other Nordic countries will help create a unified approach, ensuring all Nordic SMEs can benefit from a consistent digital ecosystem.
          • Facilitating Cross-Border Flow: Enhancing the cross-border flow of events, information and services will provide value and increase interoperability among Nordic countries. This will simplify the administrative processes for businesses operating across borders.
          • Advancing eIDAS2: Continuing work on eIDAS2 to leverage digital capabilities needed by SMEs based on a common European legal and technical framework. This will help create robust digital services while avoiding vendor lock-in, ensuring SMEs can access the best solutions available.
          By focusing on these areas, future cooperation can ensure that the Born Digital initiative continues to evolve and provide tangible benefits for SMEs across the Nordic region. The successful implementation of these strategies will lead to a more integrated, efficient and user-friendly digital ecosystem for businesses.
          Nordic Innovation I www.nordicinnovation.org