Technology is moving forward at a fast rhythm, providing things we would never imagine decades ago. Humanity is continually using technology to improve its life significantly. In a particular perspective, technology looks like the nearest form of magic for humans. Imagine a 20 years old boy who would say to Odysseus that he can call Penelope and tell her that he is coming home, but the journey will be long. The boy would indeed seem crazy to the ancient hero. If the boy called Penelope with his cellphone and the ancient hero heard her voice, he would surely think that he is a magician.
I added all of the above to give a fresh panorama of how important digital is for our societies and how it has and is improving everyone’s lives. Governments worldwide are aware that technology is strongly related to economic growth and civic and social empowerment. A digital society and economy is the next big step for all of us, and a digital government is one of the central enabling components of this.
One of the core building blocks is “Digital ID”. Hence, 165 governments on a global scale have launched partial or complete Digital ID schemes.
So, what is the significant potential of Digital ID, and how should we reimagine our societies?
Yesterday, on 3 June 2021, the EU Commission proposed a framework for a European Digital Identity. Although it may look a little bit controversial, Digital Identity can solve the Pandemic’s privacy concerns during the Pandemic last year. Let me cite the words of Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, below:
The European digital identity will enable us to do in any Member State as we do at home without any extra cost and fewer hurdles. Be that renting a flat or opening a bank account outside of our home country. And do this in a way that is secure and transparent. So that we will decide how much information we wish to share about ourselves, with whom and for what purpose. This is a unique opportunity to take us all further into experiencing what it means to live in Europe, and to be European.
From an individual perspective, the Digital ID project allows you to unnecessarily not share any data when accessing services online and fully control the data you share. So, the Digital ID respects three human rights at the same time because:
- everyone who is a citizen or resident of the EU can use it
- it will be widely usable from the public and private sector
- users are in total control of their data
So, in short, the Digital ID will make the lives of EU citizens much more effortless.
Does Digital ID have an impact on the economy of a country?
The answer to this question is a simple: YES. The Digital ID can have a significant impact on a country’s economy by creating economic value because:
- it can promote high inclusion of an individual in a wide range of services
- it can allow incremental digitization of sensitive interactions that are built upon trust
- it can formalize economic flows
- it can make business operations like taxes, registration etc., much more accessible and manageable.
All of these factors contribute to the statistic below from McKinsey:
Countries implementing digital ID could unlock value equivalent to 3 to 13% of GDP by 2030.
Does Digital ID have an impact on businesses?
The ecosystem of businesses in a country contributes significantly and directly to economic growth. Hence, governments are continually trying to provide a supporting ecosystem for companies from a legal and financial perspective. The Digital ID would improve the business ecosystem on a scale that we have never seen before.
The Digital ID would transform the KYC processes connecting customers and businesses in a fast and secure way. Another thing that it would guarantee is safe payments, a common problem that we all face today.
Another benefit for businesses would be the online interaction that they will have with the government. The online interactions that include finances, taxes, authorizations, permits, and much more would lead to more manageable operations and reduced cost for every business.
These are some of the main things that the Digital ID can give to our societies if we can unlock its potential. The role of governments is vital for this project because citizens need a project on which they can believe and use while being calm about their privacy.
Resources
- https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-identification-a-key-to-inclusive-growth#
- https://ec.europa.eu/commission/presscorner/detail/en/IP_21_2663
- https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-identification-a-key-to-inclusive-growth#
