SPOT ON DENMARK
SPOT ON DENMARK: How Germany's neighbor has mastered digital transformation Megatrends such as digitalization cause immense change in the economy: As Denmark has shown, when public authorities head down the path of digitalization, the rest of society must follow.
Reading time: approx. 15 min.
Back in 1968, the Lego engineers were already working on a new product: the Duplo brick. The mail order company Quelle had recently begun offering frozen food deliveries – a real achievement for the time. And a man circled the moon for the first time in the Apollo 8. These memories, documented in black-and-white photos, seem like a world away from what we experience in the present day. Back then, only a few people had heard the word digitalization. Yet the Danish government was already laying the foundations for its country’s digital transformation: With the introduction of the “CPR register”, which allows Danish citizens to be digitally identified in a secure, public central register, it was one of the first governments in Europe to begin the journey toward a digital future.
It took decades to establish the digital processes and structures based on this register. Today, Denmark has successfully arrived at its digital destination: Children learn to program robots while still at school, mobile networks offer coverage of 99 per cent, tax returns can be completed online in a matter of minutes, and all citizens are able to access their health records with a click of their mouse. So how have the Danes managed what many Germans dream of – and what many people are distrustful of?
When Public Authorities Welcome New IdeasAlex Ramskov Johannsen describes how two young men stood in the town hall of their municipality near Copenhagen back when digital transformation was still a distant future. All around them were people waiting to apply for various forms of identification. This sight inspired the pair to come up with a concept for an administrative kiosk of the future, where citizens would be able to apply for ID documents. They wanted the process of collecting the biometric data for the documents to take just two minutes. Their concept was a good one, but they lacked “Everything except the design,” says Johannsen. The local authority recognized what a good idea it was and gave the two men a desk and access to its systems, inviting them to develop their idea on site. “It took us a year to find an initial solution,” says Johannsen. That year fundamentally changed the way many Danes apply for their ID documents.
Technology That’s “Made in Denmark”Today, ten years later, the enterprise has developed into Biometric Solutions in Herlev, a small town near Copenhagen. And Johannsen is the CEO. The start-up employs 23 people, and the boss’s phone number is available on the website. Biometric Solutions manufactures the complete system for the ID kiosks: the hardware, the software and the service. The business model is also rather unique:
“We make the devices available to municipalities free of charge. The citizens then pay us roughly as much for the photo as it would have cost to have it taken by a photographer,” says Johannsen. He explains that it previously took about 15 minutes to apply for a passport, plus additional waiting time – whereas today it takes just two minutes.
“Citizens can fill everything in at home, and even pay the fees via our Self Service solution.” Having their photo and fingerprints taken are the only parts of the process they need to complete at the state-of-the-art kiosk in each municipality. “The kiosk enables the user to provide their biometric data in a very private way,” he says – after all, they are sharing their identifying characteristics with the state. The system was set up without government subsidies; the only support provided was space and access, simply because the authorities recognized that the solution would benefit everyone: the authorities, the citizens and the budget. The employees involved recognized the potential to make financial savings, and chose not to simply send the two men home with their idea. It is small-scale activities like these that explain the success of digital transformation.
An Aesthetically Pleasing ChangeThe Scandinavian design of its kiosks is actually just as important to the technology company than outstanding technical performance. “Many of our town halls are designed by outstanding architects, and our hardware has to fit into those surroundings,” says Johannsen. “We will remain successful if we develop our technology from a human perspective. This means designing it in a way that benefits its users, while also placing trust in them and upholding their values.”
The Road to SuccessDigitalization did not happen overnight. Even in Denmark, taking this route has meant tackling many challenges and making many changes. Citizens and businesses were forced to adapt because the state was leading the way. “It’s in our nature. We are a very small country. If you want to survive, whether as a small business or as a small country, you have to be agile,” says Lars-Frelle Petersen. For years he held the position of Director General at the Danish Agency for Digitization before switching sides and becoming Director of the Confederation of Danish Industry. “For most people in our country, completing a tax return takes just five to ten minutes,” explains Lars Frelle-Petersen. The process is incredibly fast since the most important data is available online. Very few Danes need to consult a tax professional. Denmark illustrates how easy the state can make things for its citizens.
When a Tax Return Takes Just Ten MinutesAround 15 years ago, Danish municipalities and the government developed a common strategy for digitalization of the administration. According to Lars Frelle-Petersen: “We said to ourselves: Being a citizen of Denmark should be easy. People have become accustomed to digital services in their private lives. Why should a government service not be as easy to manage digitally as ordering from an online shop?” Over the past decades, “digital Denmark” has excelled beyond all other EU countries in the field of public digitalization. 90 per cent of the population in Denmark uses its electronic ID almost daily. Public services are available to citizens via the citizen portal borger.dk, to companies via the business portal virk.dk, and everyone can access their health data through the health portal sundhed.dk.
ObligationDenmark is ranked number one in the Digital Economy and Society Index (DESI), whereas Germany is in 14th place. What makes Denmark different? “We made the solutions mandatory. And every year we run big campaigns to make the citizens aware of which solutions they should currently be using,” says Frelle-Petersen in polished German. “One of the first steps was to make e-invoicing mandatory for companies, along with a bank account to allow automatic refunds.” These measures save the company and the state a large sum.
Digital Identity for Everyday UseDigitalization is deeply rooted in Danish society, and “Easy ID”, as the Danes call it, is the perfect example of this. Its official name is NemID and it works in a similar way to the TAN list system for online banking. More than 4.8 million Danes use the Easy ID to identify themselves to banks, authorities and companies. They even use their digital ID when they sell items like a sofa privately.
Accept FailuresThe city of Copenhagen, together with Hitachi, established the City Data Exchange Copenhagen, an exchange platform for data records from the city and region. It was a flagship project, but the ecosystem of vendors that used the data did not evolve. The authorities dealt with these difficulties openly. “The fact that the situation was handled openly was very refreshing. German cities should follow the Danes’ example,” says MHP expert Marcus Willand. Willand enjoys visiting the Danish capital. He is fascinated by the way in which the city tackles the subject of mobility.
Copenhagen: MobilityThe link between the consistent development of Copenhagen into a bicycle-friendly city and its digital transformation is not obvious at first glance. “This evolution demonstrates a determination to change,” says Marcus Willand. Parking management, cargo bike sharing and all other forms of mobility in the Danish capital are organized via digital methods. The whole city is ready to embrace new mobility services.
How Digital Education Facilitates a Digital Culture For a long time, Danish schools still relied on analogue processes. But this is now set to change. One way is through Aula, a large-scale digital platform developed by Danish software company Kombit: It enables parents to see all relevant information at a glance and contact teachers. Older pupils also have access to the platform, which they can use to send messages to their teachers, for example. “We are guided by our real life experiences,” says Henrik Kirkeskov from Kombit. He explains: “To ensure that Aula reflects its future users’ needs, we’ve involved them in the development process from the start: parents, teachers and children, but also those who provide after-school care.” Digital education is the first step toward achieving digital cultural change.
Where Founding a Company Is Easier than in Berlin “It’s easy to be a company in Denmark. It’s easy to build up a company. It’s easy to meet reporting obligations. Digitalization is a win-win scenario,” says Lars-Frelle Petersen. “The idea for Pleo was born from my experience in the payments industry of linking all transactions together,” said Niccolo Perra from the startup Pleo in an interview. He and his co-founder left two of Denmark’s most successful startups to launch Pleo. Their goal was to make it possible for companies to complete reporting tasks with just a few clicks. Frelle-Petersen points out: “This system could also be transferred to Germany. The big companies could help the smaller ones with digital acceleration, for example by accepting electronic invoices.”
TechPlomacyGo digital and spread the word. Denmark’s strategy is to make itself known both at home and abroad as a digital pioneer. With this in mind, the Danes invented “TechPlomacy”. One aspect of this concept is that Danish embassies have representatives for digital transformation, and a Danish tech ambassador is based in Silicon Valley. The role of the world’s first tech ambassador is to maintain contacts with the major Internet companies.
Strategy 2025: When Everyone Shares the Same GoalsThe Danish government has recognized that the first wave of digitalization has broken. It has now allocated EUR 134 million to the Digital Growth Strategy, which runs until 2025. The initiative is primarily intended to function vertically and stimulate the development of technologies such as artificial intelligence, robotics and mobile communications in smart cities. The Digital Growth Strategy consists of 38 concrete steps to increase Denmark’s appeal as a digital location. These steps include agile regulation to help companies test new digital business models, a platform for matchmaking between talent and companies, and a digital solution that can be used to report cyber security incidents. The public sector is set to be transformed from an administrative field into a service for citizens and businesses.
The Secret to Success: Acting as OneDigital transformation in Denmark has been a success because municipalities, the state, the economy and society all share the same goals. Everyone has accepted that digitalization also means reducing the amount of administrative staff. But all things considered, everyone benefits from digital transformation. Of course, it helps that Denmark is a small country, and that there is no federal system. “Us Danes are used to making decisions as a country,” says Lars-Frelle Petersen.
So can the Danish model be transferred to Germany?“No, but you can certainly learn a lot from 15 years of digitalization progress, and also from the success of the public relations work. Trust in the way institutions handle personal data is much more pronounced among our neighbors,” says René von Stillfried, Associated Partner at MHP.
“The size and structure of our country makes it much more difficult. Denmark is governed centrally, whereas Germany has a federal system. From the perspective of the German federal states, the spotlight often falls on the “future of federalism”, rather than working with the federal government to bring the necessary reforms to the streets or into the classrooms, as was the case last December with the proposed constitutional change regarding the urgent need for digitalization in our schools.”
Keeping Things Personal with a HandshakeThe system involving citizen identification numbers that began the digital transformation had its flaws: In 2007, the numbers available for men born on January 1, 1965, ran out. The previously logical system had neglected to factor in immigration. The Danes have solved this problem pragmatically. Men can now also be assigned numbers that were originally intended for women. It makes no difference to the computer.
Yet, despite all the digital euphoria, the Danes still say they value face-to-face interaction, even in matters of state. From now on, anyone who wants to assume Danish citizenship must round off this process with a handshake; this is what the Danish Parliament has just decided.
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How Germany's neighbor has mastered digital transformation
Back in 1968, the Lego engineers were already working on a new product: the Duplo brick. The mail order company Quelle had recently begun offering frozen food deliveries – a real achievement for the time. And a man circled the moon for the first time in the Apollo 8. These memories, documented in black-and-white photos, seem like a world away from what we experience in the present day. Back then, only a few people had heard the word digitalization. Yet the Danish government was already laying the foundations for its country’s digital transformation: With the introduction of the “CPR register”, which allows Danish citizens to be digitally identified in a secure, public central register, it was one of the first governments in Europe to begin the journey toward a digital future.
Alex Ramskov Johannsen describes how two young men stood in the town hall of their municipality near Copenhagen back when digital transformation was still a distant future. All around them were people waiting to apply for various forms of identification. This sight inspired the pair to come up with a concept for an administrative kiosk of the future, where citizens would be able to apply for ID documents. They wanted the process of collecting the biometric data for the documents to take just two minutes. Their concept was a good one, but they lacked “Everything except the design,” says Johannsen. The local authority recognized what a good idea it was and gave the two men a desk and access to its systems, inviting them to develop their idea on site. “It took us a year to find an initial solution,” says Johannsen. That year fundamentally changed the way many Danes apply for their ID documents.
Today, ten years later, the enterprise has developed into Biometric Solutions in Herlev, a small town near Copenhagen. And Johannsen is the CEO. The start-up employs 23 people, and the boss’s phone number is available on the website. Biometric Solutions manufactures the complete system for the ID kiosks: the hardware, the software and the service. The business model is also rather unique:
“We make the devices available to municipalities free of charge. The citizens then pay us roughly as much for the photo as it would have cost to have it taken by a photographer,” says Johannsen. He explains that it previously took about 15 minutes to apply for a passport, plus additional waiting time – whereas today it takes just two minutes.
The Scandinavian design of its kiosks is actually just as important to the technology company than outstanding technical performance. “Many of our town halls are designed by outstanding architects, and our hardware has to fit into those surroundings,” says Johannsen. “We will remain successful if we develop our technology from a human perspective. This means designing it in a way that benefits its users, while also placing trust in them and upholding their values.”
Digitalization did not happen overnight. Even in Denmark, taking this route has meant tackling many challenges and making many changes. Citizens and businesses were forced to adapt because the state was leading the way. “It’s in our nature. We are a very small country. If you want to survive, whether as a small business or as a small country, you have to be agile,” says Lars-Frelle Petersen. For years he held the position of Director General at the Danish Agency for Digitization before switching sides and becoming Director of the Confederation of Danish Industry. “For most people in our country, completing a tax return takes just five to ten minutes,” explains Lars Frelle-Petersen. The process is incredibly fast since the most important data is available online. Very few Danes need to consult a tax professional. Denmark illustrates how easy the state can make things for its citizens.
Denmark is ranked number one in the Digital Economy and Society Index (DESI), whereas Germany is in 14th place. What makes Denmark different? “We made the solutions mandatory. And every year we run big campaigns to make the citizens aware of which solutions they should currently be using,” says Frelle-Petersen in polished German. “One of the first steps was to make e-invoicing mandatory for companies, along with a bank account to allow automatic refunds.” These measures save the company and the state a large sum.
Digitalization is deeply rooted in Danish society, and “Easy ID”, as the Danes call it, is the perfect example of this. Its official name is NemID and it works in a similar way to the TAN list system for online banking. More than 4.8 million Danes use the Easy ID to identify themselves to banks, authorities and companies. They even use their digital ID when they sell items like a sofa privately.
The city of Copenhagen, together with Hitachi, established the City Data Exchange Copenhagen, an exchange platform for data records from the city and region. It was a flagship project, but the ecosystem of vendors that used the data did not evolve. The authorities dealt with these difficulties openly. “The fact that the situation was handled openly was very refreshing. German cities should follow the Danes’ example,” says MHP expert Marcus Willand. Willand enjoys visiting the Danish capital. He is fascinated by the way in which the city tackles the subject of mobility.
The link between the consistent development of Copenhagen into a bicycle-friendly city and its digital transformation is not obvious at first glance. “This evolution demonstrates a determination to change,” says Marcus Willand. Parking management, cargo bike sharing and all other forms of mobility in the Danish capital are organized via digital methods. The whole city is ready to embrace new mobility services.
For a long time, Danish schools still relied on analogue processes. But this is now set to change. One way is through Aula, a large-scale digital platform developed by Danish software company Kombit: It enables parents to see all relevant information at a glance and contact teachers. Older pupils also have access to the platform, which they can use to send messages to their teachers, for example. “We are guided by our real life experiences,” says Henrik Kirkeskov from Kombit. He explains: “To ensure that Aula reflects its future users’ needs, we’ve involved them in the development process from the start: parents, teachers and children, but also those who provide after-school care.” Digital education is the first step toward achieving digital cultural change.
Go digital and spread the word. Denmark’s strategy is to make itself known both at home and abroad as a digital pioneer. With this in mind, the Danes invented “TechPlomacy”. One aspect of this concept is that Danish embassies have representatives for digital transformation, and a Danish tech ambassador is based in Silicon Valley. The role of the world’s first tech ambassador is to maintain contacts with the major Internet companies.
Digital transformation in Denmark has been a success because municipalities, the state, the economy and society all share the same goals. Everyone has accepted that digitalization also means reducing the amount of administrative staff. But all things considered, everyone benefits from digital transformation. Of course, it helps that Denmark is a small country, and that there is no federal system. “Us Danes are used to making decisions as a country,” says Lars-Frelle Petersen.
“The size and structure of our country makes it much more difficult. Denmark is governed centrally, whereas Germany has a federal system. From the perspective of the German federal states, the spotlight often falls on the “future of federalism”, rather than working with the federal government to bring the necessary reforms to the streets or into the classrooms, as was the case last December with the proposed constitutional change regarding the urgent need for digitalization in our schools.”
Yet, despite all the digital euphoria, the Danes still say they value face-to-face interaction, even in matters of state. From now on, anyone who wants to assume Danish citizenship must round off this process with a handshake; this is what the Danish Parliament has just decided.
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