Sitra’s statement on the draft for Finland’s digital compass

Background

The Finnish Innovation Fund Sitra has issued a statement on the draft for Finland’s digital compass (in Finnish).  

The digital compass is Finland’s national strategic road map relating to the European Commission’s Digital Decade initiative, on which Sitra earlier issued a statement to the European Commission. Finland is now among the first countries to implement the compass.

Finland’s digital compass has been prepared in co-operation with stakeholders. The co-operation in preparing it has worked well, and Sitra has actively taken part in the preparations. Both international and national points of view have been taken into consideration in the work on the digital compass.  

The goals of the compass are to create a shared national vision and objectives for digitalisation and the data economy by 2030. Four areas are under review: competence, safe and sustainable digital infrastructures, the digital transformation of business and the digitalisation of public services. The digital compass also concerns European regulation of the digital economy, its rules and innovation activities.  

The compass uses and considers reviews, projects and initiatives of Sitra, among others. For example, the memo on Finland’s strengths, challenges and opportunities in building a data economy (in Finnish) released by Sitra in January 2022 has been used as background material in preparing Finland’s digital compass. Sitra wants to support the implementation of the compass and co-ordination between the compass and Sitra’s initiatives in the future as well. 

Sitra’s main observations

Digitalisation and the data economy are phenomena that cut across society and require cross-sectoral management and co-operation. Sitra considers Finland’s digital compass to be a welcome tool for the government to steer this development over the long term across different governments.

Sitra considers it is important for the compass to create a willingness and situational picture also more extensively in society. In the best case, the compass can offer a co-operation model in which the government with other parties monitors the realisation of the set objectives and plans the measures required for their promotion.  

In particular, Sitra wants to highlight four key points of view: 

• Sitra considers it is important that the fair data economy is strengthened as an all-encompassing theme of the digital compass. It must be possible to specify further and complement the measures, key results and indicators relating to the fair data economy as the situational picture improves. Sitra’s Road Map to a Fair Data Economy strengthens the situational picture and identifies the necessary measures and metrics. Sitra is delighted to be involved in implementing and further developing Finland’s digital compass. 

• Sitra considers that a new theme should be added to Finland’s digital compass: a national action plan for a health data space. The programme would support the national growth strategy for the health sector and the implementation of its road map, as well as the recommendations concerning the prerequisites for the growth of the data economy published by Sitra in its working paper in spring 2022.  
• Sitra considers it is important that the compass will support Finland’s twin transition towards a digital green future and encourage strong investments in competence. The climate and environmental dimension of the compass should be significantly strengthened to align it with Finland’s climate and environmental strategy for the ICT sector and for ecological sustainability, which has been chosen as a key value of the digital compass, to be realised. This is not only a prerequisite for solving the ecological sustainability crisis, but it also offers Finland the position of a significant pioneer when ecologically sustainable digital emerges as a focus of international interest as a theme. 
• National competence should be strengthened and investments in competence should be made in co-operation with diverse parties. It is necessary to emphasise enhancing the digital resources of individuals and society in general, and this should be considered as an all-encompassing matter. For example, in the digital era, the right to one’s own data should be made a human right. Everyone needs new competence and digital capability, not only those who utilise digitalisation in business. As digital and data skills are a significant part of a person’s ability to function in society, this is also a question of our democracy’s sustainability and capacity for renewal. It is necessary to know how to use digital services: if the resources of the elderly population, for example, are not taken care of, the benefits of digitalisation will remain unused and part of the population will be marginalized. 

Challenges and opportunities 

The Finnish discussion on the data economy and the general culture of discussion on the economy in general have room for improvement. In general, things are not discussed, or even if they are, they are approached mainly from issues of data protection and data security. 

Safeguarding Finland’s well-being requires taking ecological sustainability into consideration in all decision-making and activities. The ecological sustainability crisis is the key factor influencing our future, and it needs to be resolved quickly. Therefore, alongside measures that promote the digital green transition and increase the carbon handprint, the digital compass should also comprehensively deal with measures aimed at reducing the carbon footprint of digital technology. 

Russia’s war of aggression in Ukraine and the generally escalated security policy situation underlines the importance of the transparency of the data economy, our data sovereignty (both as individuals and nation), data economy skills and digital bildung further alongside cybersecurity. One of the key questions is how technology can be harnessed to support democracy and peace and how we can identify and combat different forms of influence through information when the operating environment becomes increasingly challenging (e.g., deepfake technology and other new forms of influence). As the development of technology is fast, the objectives relating to digital information literacy, for example, should be sufficiently ambitious and future-oriented. 

Goals 

The educational system should be developed to ensure sufficient basic digital skills among all graduates. Besides this, it is necessary to decide on how to take care of updating the competence of those who are in or have already retired from working life. This is likely to require some kind of programme and measures by several parties. The well-being analyst training programme is an example of a new kind of a multi-disciplinary training programme that is based on Sitra’s international multi-party pilot project and competence survey in healthcare. In addition, the aim must be to take care of the digital competence of the entire population. Data literacy and data analytics skills, for example, are genuinely important skills. 

The need for making the national competence capital visible emerged in the work on the strategic intent. Its aim is to facilitate competence building as smoothly and comprehensively as possible. When competence is made visible, such as digitally and in an open data lake, as we simulated in the Pirkanmaa simulation, it is easier to build and use competence and make it visible. This is also significant from the point of view of the national economy. 

The aim is to prepare a situational picture of the national competence capital that is as comprehensive and up-to-date as possible. The situational picture will be used in developing services, steering operations and targeting policy measures. An overview of the national competence capital is needed to improve the matching of education and working life. When there is more accurate information about competence, talent and jobs and learners and educational institutions will come together even better. The strategic intent is presented in Sitra’s Towards lifelong learning publication. 

Competence also includes identifying the negative environmental impacts of digitalisation and increasing data use and the ability to reduce the harmful impacts. Such measures include sustainable software development and designing resource-efficient digital services (green coding), circular material and product design and the recycling of materials (digital hardware). Increasing related competence is also a key measure in order to develop sustainable digital solutions. However, the digital compass does not draw attention to the above-mentioned solutions or associated measures, which is a shortcoming in the context of ecologically sustainable digitalisation and the data economy. 

In addition to technology, the infrastructure cardinal point also includes soft infrastructure: counselling, contractual arrangements, training and competence, design of digital services and better coding.  

It is about the ability to benefit from the infrastructure. An example of this is the simulation of open data in Pirkanmaa and the scenario prepared based on it, highlighting, among other things, how there already are lots of opportunities for open data. However, they are not quickly tested or piloted. We would need more agile development and experiments in order to quickly test ideas in practice. This would allow us to proceed faster. 

The implementation and follow-up of the compass should be carried out in co-operation with different parties, taking the changing operating environment into consideration. Sitra is active in this area. 

A functional data economy requires improving the authorities’ administrative processes so that businesses can operate in the changing internal market. As a generalisation, 25% of Finnish businesses state that there is no competence, while the rest state that there are no resources. This shortage of competence and resources demands a response. 

Key results 

The objective of “Building a digitally capable Finland” (p. 18) remains somewhat general and lightweight. Merely being able to function in the digital world is not enough, which the drafters also identified. The significance of digital interaction and encounter, or how to behave in a considerate way on social media, for example, should be emphasised here. It is a question of how the functioning of the technologically and otherwise strongly changing society and new operating environments should be reflected in the mental growth and behaviour of people. The importance of mutual respect is a good highlight. As is the need for retaining trust in society. In order to develop, Bildung also requires an understanding of the operating environment and changed means of interacting. 

The negative environmental impacts of digitalisation and increasing data use can be significantly reduced through various measures. Such measures include sustainable software development and designing resource-efficient digital services (green coding), circular material and product design and the recycling of materials (digital hardware). Increasing related competence is also a key measure in order to develop sustainable digital solutions. However, the digital compass does not put in the spotlight the above-mentioned solutions or associated measures, which is a significant shortcoming in the context of ecologically sustainable digitalisation and the data economy. 

The table on the objectives and measure of the compass, Digital infrastructure/Data economy (“Digitaalinen infrastruktuuri/Datatalous; Annex 1, page 43) discusses data spaces. Only traffic data projects are listed under decisions and interfaces (“Päätökset ja liitynnät”). The on-going Sitra-co-ordinated European health data space project TEHDAS, ”Joint Action Towards the European Health Data Space – TEHDAS”, should be added to this section.  The project is funded by the 3^rd EU Health Programme, and it develops joint principles for the use of health data. In addition to Sitra, associate organisations in Finland include the National Institute for Health and Welfare (THL), Findata, CSC and VTT.  

The TEHDAS project is essentially linked to the proposal for the regulatory base of the European Health Data Space (EHDS) released by the Commission in May 2022. The proposal puts the use of health data in the European internal market in the spotlight and creates prerequisites for the use of health data in individuals’ health, public health, research and corporate development and innovation activity in the rapidly growing health data economy. 

In connection with the compass, a national health data space action programme should be launched. The first step is to initiate a review and effective implementation of the strategy for the well-being and healthcare sector with the aim of promoting digitalisation and data economy. The strategy should include national impact objectives for internalisation and the development of the European internal market. 

The digital compass successfully brings to attention the opportunities provided by digital technologies addressing climate, circular economy and environmental challenges and associated measures. The draft puts in the spotlight the opportunities provided by developing and emerging digital technologies, such as 5G, 6G, IoT, artificial intelligence, blockchains, quantum technology, etc., in promoting the digital green transition. However, many of these technologies are very energy-intensive. The negative environmental impacts caused by the increasing use of these digital technologies and measures aimed at reducing them are not, however, present in the digital compass. 

If Finland wants to be among advanced digital countries and a trailblazer in the fields of digitalisation and the data economy, Finnish solutions must also be among the best in the world when it comes to overall sustainability. This requires identifying, comprehensively assessing and measuring the positive and negative environmental impacts associated with these digital technologies and solutions. In this way, Finland can also be an example to other EU states in including the climate and environmental dimension in the digital compass and increase awareness of its work as the author of the world’s first national ICT climate and environmental strategy.  

The draft digital compass comprehensively takes into account the opportunities provided by digitalisation and data in the green transition (carbon handprint). On the other hand, the draft fails to acknowledge the inherent sustainability challenges of the ICT sector and IC technology (carbon and material footprint) associated with the short lifecycle of hardware and use of natural resources, inefficiency and short lifecycle of software solutions and the energy consumption and carbon footprint of the overall infrastructure caused by the increasing volumes of data. The draft digital compass also does not list measures to reach climate- and resource-efficient operating models that use digitalisation and data (data economy).  

The goal of the digital compass is to create a shared national vision and progress plan for digitalisation and the data economy by 2030. Digitalisation and the data economy concern all sectors, making up the foundation of economic reform and being a key factor in the future competitiveness of businesses.   

The objective and measure table of the compass, Digital transformation of businesses / Digital technologies / Decision and interfaces (“Yritysten digitaalinen muutos / Digiteknologiat / Päätökset ja liitynnät”; Annex 1, page 53) mentions Sitra’s Fair Data Economy concept and A Roadmap for a Fair Data Economy project. In addition to the Roadmap for a Fair Data Economy, Sitra’s Fair data economy theme includes three other projects: Health Data 2030, Competitiveness through Data, Gaia-X Finland, all of which contribute to the goals of the digital compass in its different cardinal points, including the digital transformation of businesses. 

Indicators 

Competence building is a multidimensional phenomenon. Learning takes place at work, during leisure, in the education system and through other diverse learning environments. Competence also has a multidimensional importance for capacity for renewal, Bildung, well-being and engagement as well as competitiveness and the economy. As a result, the measures to develop it must be diverse and a collaborative effort involving many parties. In order to ensure that we are proceeding in the right direction, the indicators must also be diverse. 

Learning structures should be developed by actively strengthening innovative and new solutions in ecosystems and competence clusters emerging in different forms of public-private co-operation. Investments in digitalisation and data economy competence clusters by international companies should be facilitated and made attractive by making Finland’s strengths visible.  

Sitra has compiled a view of promoting lifelong learning in Finland in a report that presents seven recommendations: 

• The in-depth examination of lifelong learning requires the synthesising of different thought models and placing the individual at the centre of the mindset. 
• Those involved should collaborate on a joint lifelong learning strategy. 
• Greater political consensus needs to be achieved on the expected outcomes of long-term investments in competence development.  
• Key contributors must gauge their development work to meet the real competence needs of regions and businesses. 

• Stakeholders are developing new goals-based ecosystems for the renewal of skills. 
• Lifelong learning providers produce and rely on evidence-based information.  
• A broad-reaching knowledge-based leadership model inclusive of the different contributors must be developed.   

For example, a knowledge-based leadership model describes how strategic goals are jointly defined, a shared situational understanding is achieved, how knowledge is jointly produced and interpreted and how knowledge about the impact of measures guides decision-making. 

The phenomenon-based management of lifelong learning requires decentralised leadership and taking the decision-making close to the customer interface. The benefits pursued should be understood in order to know what kind of change is being pursued and which indicators should be used. An ecosystem-like mindset and shared platforms are needed in competence building. 

The data economy in itself is an indicator of the value generated by the functioning of the data market. Specifying the metrics of the data economy requires correct and also unforeseen questions. 

The indicators of the information and communications technology sector are a crucial matter from the point of view of the compass. According to different estimates, the ICT sector accounts for 4–10% of the world’s energy consumption. The lifecycles of hardware are getting increasingly short due to technological development, and electronics waste is already the fastest-growing type of waste globally. According to forecasts, the ICT sector’s share of global energy consumption will increase to slightly over one-fifth already by the end of this decade, so increasing energy-savings in the industry is important.  

Sitra regards as worthwhile the achievement of an international regulatory framework concerning the monitoring of emissions so that the carbon footprint can be accounted for throughout the lifecycle of a product, from its manufacture right up to the end user. According to a study by ETLA Economic Research, a significant share of the emissions from the Finnish ICT sector is produced in international supply chains, so the focus of measuring and reporting emissions should be on the entire value chain.  

Developing tools for accounting for the carbon handprint of businesses and accelerating their adoption is a good goal, while remembering that accounting for the carbon footprint underlies accounting for the carbon handprint.  

Follow-up of impact and evaluation of societal impacts 

Sitra considers the follow-up of impact and evaluation of societal impacts in all cardinal points to be an essential part of the implementation of the compass. Follow-up and evaluation also require co-operation and possibly the development of new approaches and indicators. A good example of good analysis work is the report on sustainable economic growth, which, among other things, discusses the fundamental question: why has Finland not been able to benefit from its good starting points to create economic growth that will secure the well-being of our society? The report also considers the impacts of RDI investments. 

Other observations concerning the draft digital compass 

Sitra finds that the targets set for digital transition and enhanced competitiveness are unattainable without investments in value-based data policy and the development of fair data economy rules. We want to emphasise the digital green transition and digital sovereignty. Responsible and sustainable use of data will reform Finland’s economy, while an economy that serves the needs of the climate and nature will pave the way for Finland’s well-being. Digital green investments create jobs, livelihood and export opportunities. 

Finland can also be an example to other EU states in implementing a fair data economy and including the climate and environmental dimension in the digital compass and increase awareness of its work as the author of the world’s first national ICT climate and environmental strategy.   

Sitra has worked over the long term to understand the opportunities provided by the fair data economy and sustainable development and digital green transition and how to benefit from them in Finland and internationally. Sitra supports the ambitious yet practice-oriented implementation of the digital compass. 

Further information

Public consultation in the consultation service.

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