The Great Digital Accelerator

This article was also published in El País

In a few years’ time, when we look back at the pandemic, we are likely to draw an unexpected historic conclusion: COVID-19 was the great accelerator of digital transformation of people and societies, economies and public administrations. The digitalization agenda, while it was important before, is now essential. 

This sense of urgency permeates into the recently conceived Digital Spain Agenda 2025, which spent years without forward-looking guidance, and now aims to put the country at the forefront of global digitalization with a EUR 70 billion investment over the next five years. The advantage of this initiative is the conviction that the first pillar is the digitalization of government.

We must acknowledge that Spain is at a relatively advantageous position. According to the United Nations index, it ranks 17th worldwide and 11th in Europe in terms of digital governance, thanks in part to the important professional team of engineers responsible for the connectivity infrastructure and digital modernization of administrations.

What the crisis is forcefully accelerating is the adoption by individuals and businesses of digital channels to interact with administrations. This trend raises higher expectations of agility in public services, many of which are still delivered in analogue systems with outdated interactions and serious accessibility issues. Turning these analogue pockets into digital facilities will involve a two-fold task: improving digital skills of the population and accelerating the digitalization of administrations with streamlined and customized services.

The second major focus of the digital agenda is the promotion of innovation and digital entrepreneurship, two aspects in which Spain is lagging behind. According to the European Innovation Index, the country is less innovative than its Portuguese and French neighbors. Interestingly, northern Portugal is the most innovative region of the Iberian Peninsula. The Spanish economy is characterized by a fabric of small businesses with low digitalization, totaling 99% of companies and 50% of jobs. However, the creation of new technology-based companies shows great vitality, in particular early-stage start-ups , but with an embryonic development of the innovative ecosystem and presence of venture capital.

It is therefore urgent to move forward with a start-up law to promote digital entrepreneurship, encourage venture capital and attract digital talent. In this context, the public sector can be a major catalyst for innovation through public procurement. Public spending on government technology, which already constitutes a massive market, will increase further and may be a driving factor in the development of digital companies that provide technology services to solve public policy problems.

Following the Madrid GovTechLab model launched early this year, the creation of the GovTechLab innovation incubator nationwide will help to promote the use of new technologies such as blockchain between public administrations. As France has been doing since 2013 and England since 2017, this mechanism should promote public entrepreneurship andGovTech start-ups.

The third major focus of the digital agenda is data economy and artificial intelligence. This goes beyond the intense and necessary debate about personal data privacy, the ethics of algorithms and the issue of digital rights, stirred by tracking applications. It is also an economic challenge. Data economy, i.e. business models driven by data as primary asset and productive input, has become the most dynamic segment of modern economies.

At European level, Brussels has prioritized the construction of a single digital market and the creation of a European data strategy. The economic implications are compelling: The European Commission estimates that the value of the data economy reached EUR 300 billion in 2016 and will reach EUR 739 billion by 2020, representing 4% of the bloc’s GDP. Globally, the regulation of the data economy and the control of digital companies are at the center of tensions between Europe and the United States. Indeed, G20 ministers have focused on information security and data trade, after the US-Europe data exchange agreement was voided.

The public sector can be a great enabler of data-driven ventures generated by the administrations. According to digital agency Red.es, in 2018 there were 708 companies in Spain that generated services for third parties based on information produced by the public sector, with a turnover in the neighborhood of EUR 2 billion and creating 19,000 jobs.

In this regard, creating a state chief data officer would be a great achievement for the digital agenda. The most urgent task in digital transformation is in data economy, both its regulation and its governance, to ensure responsible use while energizing digital entrepreneurship. This task has a global dimension and will require multilateral solutions, and thus, we should start to conceive a global data organization.