Digital Government in Europe: In Pursuit of Cross-Border Functionality

Our new five-part series, which includes an introductory outline, reports on the progress of digital government in major regions worldwide.

Europe: Digital-government services are being integrated across the region although progress is still being held back by limited cross-border accessibility, poor engagement with digital public services and skills gaps.

• Digital government has become a significant priority for the EU during the past decade partly because of the role that digital public services play in facilitating a digital single market. This comes amid the backdrop of rising concerns about European digital sovereignty.

• Emerging technologies developed by non-EU technology companies are perceived as a threat to EU citizens’ control over their personal data. With these non-EU firms also considered a potential constraint to the growth of EU technology companies as a result of aggressive takeovers, there are moves by the European Parliament and other EU rulemakers to assess takeovers through new instruments.

• The Once-Only Principle (OOP), launching in 2023, requires the linking of base registries across government and countries but many nations are behind the EU deadline for implementation.

• Although there is a high degree of alignment with EU strategies and frameworks in some EU and European Free Trade Association (EFTA) countries (notably Austria, Estonia, Iceland, Montenegro, the Netherlands and Norway), progress lags at both the national and local levels.

• There is close to universal adoption of digital ID in Europe although cross-border access to public services using digital ID is still limited.

• European civil services have a long way to go to embed 21st-century digital skills among their workforces. Only 35 per cent of public-sector organisations in 2021 had an organisation-wide digital-skills programme.

The Three Principles of Whole-of-Government Transformation

Purposeful Governance

EU institutions are central to digitalisation efforts in European countries.­ The European Commission^[_] sets strategies and defines targets, enforces change through directives, regulations and decisions, incentivises cooperation and encourages adoption through funding programmes, providing common standards and governance frameworks. Many of these initiatives apply to the EFTA area and to EU candidate countries, extending their reach beyond EU member states. The Council of Ministers (along with the European Parliament) approves or rejects legislation proposed by the commission and provides member-state representation at the EU level. The council can further influence the commission using ministerial declarations,^[_] which define agreed actions for each member state. The private sector, including financial institutions, has been instrumental in the development of digital strategies and action plans. They have further driven uptake of some digital-government tools, most notably digital ID.

Figure 2

How governance of digital government has evolved through directives, frameworks and declarations

Source: TBI

Two drivers of digital government stand out at the EU level. First, digital public services are seen as critical to achieving the digital single market by allowing people to access services, goods and data reliably and quickly across borders. Indeed, the eGovernment Action Plan 2016–2020 was conceived as part of the Digital Single Market Strategy. Second, concerns about European digital sovereignty, especially around emerging technologies, have also come to the fore.

In line with the Shaping Europe’s Digital Future strategy and its vision for a digital decade, the European Commission has communicated the 2030 Digital Compass, which identifies digitalisation of public services as one of four landmark points in the EU’s digital decade and sets targets to achieve them. The 2030 policy programme was adopted in September 2021 and defines digital targets first introduced in the Digital Compass for member states, as well as a governance framework for achieving these goals. More than €150 billion targeting various programmes, including the Recovery and Resilience Facility, has been set aside by the EU for the purposes of digitalisation, a large part of which will be spent on digital government.^[_]

Covid-19 has also accelerated digital transformation in Europe, with the pandemic representing governments’ first large-scale experience with data-driven policy and decision-making. However, not all parts of government fast-tracked their transition to online services.

Enabling Infrastructure

Just over 90 per cent of services offered across 36 European countries require a form of identification and authentication either online or offline. Digital IDs have been almost universally adopted in the EU with only two member states (Bulgaria and Cyprus) without a national digital-ID system in operation in 2021. Despite this widespread adoption, only 64 per cent of the public services offered online accept official national digital IDs. A further 9 per cent require another government mechanism (for instance, a tax number) and 1 per cent allows private-sector digital IDs such as e-banking tokens. Less than 44 per cent of the services available online allow for a single sign-on, necessitating re-authentication across different government agencies. Malta, Iceland, Estonia, Finland, Denmark and Norway lead the EU and EFTA’s use of digital IDs with more than 90 per cent of public services allowing their use.

The European Commission has further proposed a digital-identity framework backed by legislation that will see digital wallets linking national digital IDs with personal-attribute proofs, such as driving licences used to access online services without compromising or requiring the unnecessary sharing of personal data.

The EU’s electronic identification authentication and trust services (eIDAS) regulation developed a framework to ensure cross-border use of national digital IDs, allowing access to public services in other EU countries. While there has been progress, more needs to be done, particularly around “sending capacity”: making national digital IDs compatible across borders through technical nodes.^[_] In 2021, approximately 43 per cent of services could be accessed by non-domestic users in the 36 European countries analysed and only a quarter of public services (24 per cent) enabled access with digital IDs from multiple European countries.

In a further breakdown of cross-border interoperability, 67 per cent of the EU27 have receiving capacity in production for some members states while 18 per cent are still conducting tests and 15 per cent have none at all. In terms of sending capacity, 37 per cent are in production, 21 per cent are testing and 42 per cent have none at all.

Responsive Institutions

The OOP, set to launch in 2023, is an integral part of the EU single digital gateway enabling public entities across the region and at all administrative levels to share citizen data with each other so that those seeking any public services have to enter their information only once. It first appeared in the Malmo Declaration in 2009 and later in the Tallinn Declaration of 2017, and was a key part of the eGovernment Action Plan 2016–2020. A dedicated technical system is expected to connect 21 online processes, crucial for citizens and businesses, by December 2022. These processes are to be established in each member state with data sources spread across the EU. A 2020 analysis of the OOP government-to-business interactions highlighted that the infrastructure enabling the OOP is in place in 22 of 30 countries.

However, proactive government was the worst-performing metric in the OECD’s 2019 Digital Government Index, and the impact of the OOP has been limited to selected groups of services or registries. Limited progress has also been seen in implementing the OOP at the local level. 

While some initiatives exist at the EU level to support workforce-skills development, a 2021 survey of seven European countries found that only 35 per cent of public-sector organisations have an organisation-wide programme for digital-skills development. Some of the initiatives at the EU level include the Gov3.0 project consortium’s Massive Open Online Course on the Basics of Digital-Government Transformation. The Interoperability Academy also received a €500,000 investment from the ISA2 programme.

Barriers

• Poor engagement with digital-government services: While engagement with both the internet and digital government increased by 18 per cent between 2011 and 2020, a 27 percentage point^[_] adoption gap persists between e-commerce and e-government among users. This gap is widening and reflects the divergence between digitalisation of existing processes and user-centric digital services.

• Mismatch between EU governance and action at local-government levels: Despite EU attempts to create access to cross-border e-government services, only 43 per cent of national services can be accessed online by cross-border users (compared with 81 per cent for national users). A 2017 study found that 26 of the 28 EU member states enjoyed an alignment rate of 75 per cent with the old version of the European Interoperability Framework (EIF) although Belgium and Portugal both had alignment rates of less than 50 per cent. At the local level, alignment drops significantly as city governments grapple with slow technology distribution, weak information and communications technology (ICT) strategies and officials trying to manage non-interoperable databases. Under the new framework, countries have struggled to meet the requirements of web accessibility (Directive EU 2016/2102) and multilingualism.

• Digital laggards may threaten the EU’s digital ambitions: A lack of coordination between countries in their digitalisation efforts could lead to dependency on outdated, closed systems and prevent EU actors from leveraging the full potential of the single market through economies of scale. According to the EU’s International Digital Economy and Society Index, the “EU top four” scored 80.5 per cent on the digital public-services measure, slightly behind the USA (81.4 per cent) and South Korea (85.3 per cent), while the EU bottom four came last with a score of 34.1 per cent.^[_] The worst-performing states have a myriad of problems although they all share a lower-than-average digitalisation of citizen and business services. For instance, in Romania, a lack of IT systems, specialists, efficient and effective IT architecture, and legislative and procedural frameworks is evident. In Greece and Croatia, a need to simplify public services and ensure interoperability between services and data are significant challenges while in Hungary, the need to digitalise public services and a lack of open data are concerns.

• Coordination of digital government at the local level: A total of 85 per cent of central-government services were provided online in 2021, compared with only 59 per cent of local services. This disparity in service provision as well as the lack of coordination between different levels of government can be a significant barrier to digital government. In Germany for example, the use of different, incompatible contact-tracing systems between state and federal governments hampered efforts to combat Covid-19. However, there are some exceptions. In countries like Austria, Estonia, Iceland, Montenegro, the Netherlands and Norway, there is a seamless integration of all three levels of government. Local-government digitalisation is hampered by a variety of factors including the lack of skills in technology and project management, mistrust between local and national level especially when it comes to directional changes implemented by new administrations, the perception of autonomy from central government as an election winner for local politicians, and the problems of legacy data, systems, processes and costs.

• Human capital: Building human capacity to ensure successful digital transformation is a recurring challenge with technical and project-management skills lacking at the local level. Furthermore, training staff to incorporate stakeholder-management techniques in the design, implementation and delivery of services was seen as a critical challenge by member states in 2021.

• Organisational barriers: The Joint Research Centre has warned that organisational and bureaucratic obstacles decrease the use of new technologies in the public sector. The uptake of integration tools, such as application programming interfaces (APIs), can also be stymied by an organisational belief that they are beneficial only to external parties. The same problem exists for open government as the most valuable data (for example, geospatial address data) represent a source of income for agencies.

Opportunities

• Increasing the uptake of digital ID for local, national and cross-border services: Member states can use several tools to increase uptake of digital IDs. At the national government level, they can monitor the uptake of services built on foundational digital innovations (such as digital ID), and ensure services linked to them are user-focused and provide accountability. At the local government level, providing authorities with their own agency bound to clear timeframes for the implementation of national policies can incentivise increased alignment. Italy’s three-year plan for ICT in public administration included a requirement for local government to submit their own plans to arrive at the prescribed destination, with the potential to withhold funding for local administrations that did not comply with the objectives. At the business level, governments could prioritise those businesses that have implemented digital IDs. Such an approach has been used to prioritise the approval of digital business requests in Latvia. Finally, to boost government-to-citizen services, coordination with banks and other financial institutions most relevant to the lives of citizens could increase the take-up of digital IDs, as seen in Estonia.

• User-centred approaches with new and emerging technologies: Governments are starting to apply emerging technologies in public administration but they must take a user- and citizen-centred approach. A toolbox or one-stop shop for citizen engagement and user-centric best practice could be drafted with new technologies in mind.

• Cross-border data interoperability: The EU’s OOP system enables government-to-government cross-border data-sharing at all administrative levels. To facilitate this, well-managed data in base registries are essential to allow the development of integration tools such as APIs. Since the costs of OOP are upfront, and benefits unlikely to be fully realised until the medium to long term, successful implementation requires long-term political buy-in across all levels of government. The EU should focus on creating a culture that can support the scale-up of OOP across all levels of government in the long term.

• Cross-border services: The EU has an opportunity to increase the number of cross-border services available to citizens and businesses. Expanding the uptake of digital ID and the rollout of eIDAS regulation will help to increase access to cross-border public services. Equally, the OOP system can ensure that people and businesses do not have to repeatedly provide the same information to several agencies in different EU countries. There may also be opportunities for proactive cross-border public services for citizens and businesses.