Challenge blog post: Real-Time Economy
Even though it's not discussed often enough in the media, it is clear that we are moving toward both a real-time society and a real-time business environment where making business transactions (like invoicing and government reporting) will be as easy as adding a new piece of music to your Spotify playlist.
The real-time economy (RTE) is an environment where all the transactions between business parties are in a digital format, are increasingly automatically generated, and are completed in real-time from both from business and IT-processing perspectives.
For enterprises, the public sector, and citizens, this means that orders, order confirmations, invoices, and payments will flow from system to system without delays. This makes it possible to move towards electronic archiving, electronic book-keeping, automated accounting, and real-time tax reporting. The benefits for society at large are enormous in terms of productivity, better jobs, less grey economy, EU harmonization, and environmental conservation.
In our several years of co-innovation, we have been able to clearly see that we have reached a point where optimizing our operation models and data flows separately in different sectors no longer gives significant results. In order to really make a difference, we need to work together and find new business models across these different sectors. All stakeholders must be involved to find new and more efficient ways of working through co-innovation.
In Finland, the national income-register and payment specific reporting are great examples of these kinds of initiatives. On a European scale, the unification and automation of small and medium-sized enterprises' accounting and VAT-reporting would significantly develop the single market in EU and minimize the administrative costs for all parties.
Sitra estimates that in Finland, the national income register will save a least 100 million euros a year. Another 100 million euros in savings potential for the government alone can be found in standardizing the data-content in e-invoicing. This will enable automation for procurement processes. Automation of VAT-reporting is estimated to have a total impact of several hundred millions in savings and will also reduce stress and administrative burden for SMEs (source in Finnish).
Scaled to the European level, we can get numbers that have an impact on the entirety of Europe.
These are the direct benefits of increased efficiency. In addition to these, there is a whole dimension of possibilities based on having real-time data as a basis for decision making, BI-solutions, and a variety of new ecosystem-based services.
On this blog, we have discussed both business transformation and digital transformation. Both are part of a digital revolution and that is something we should act upon now. The benefits of the RTE to enterprises, the public sector, and citizens are clear. That´s why I would like to hear network members discuss their ideas about the benefits of the RTE that they think are crucial. I have invited Taavi Kotka from the Ministry of Economic Affairs and Communications for Estonia and Jukka Viitasaari from The Federation of Finnish Technology Industries to share their views on the topic. Since digitalization will be an important topic in the upcoming parliamentary elections, it would be also interesting to hear what kind of ideas real-time economy possibilities raise among political candidates.
Fredrik Jansson is Tieto's leading expert on the real-time economy and also has a solid experience in building public sector digital services. At Tieto, Fredrik acts as a program manager for real-time economy related topics and projects. Fredrik is also a member of the steering group and an advisor for the joint effort to implement real-time economy in Finland and Estonia by Finnish and Estonian technology associations.
To learn more about the thoughts of Fredrik Jansson, please download the full article.