Nordic Digital Transformation
Digitisation, Digitalisation, & Digital Transformation: How the Nordic Region Is Mastering All 3.
The current century has been defined by rapid digital disruptions. Everyday errands are now run online. Entirely new business sectors are emerging – and others disappearing. Even language is being distorted to accommodate the vocabulary of the digital world. Digitisation, digitalisation, and digital transformation are catchwords that represent this era and, as such, are tossed around frequently and often interchangeably. However, despite sounding similar, their differences are significant.
Digitisation refers to turning analogue into digital: letters into emails, paper documents into pdf files, cassette tapes into mp3, and magazines into websites. In business terms, it means carrying on the same activities, but in the digital realm to speed up communication and facilitate processes.
Digitalisation takes things one step further – it implies transforming business activities themselves and generating new ways of thinking and operating through technology. As Deloitte suggests, digitisation means ‘doing digital’, while digitalisation means ‘being digital’.
Digitisation enables digitalisation, and the latter carries a positive connotation for businesses – digitalisation creates new opportunities, such as the possibility of expanding into new markets and generating more customers. For example, a magazine that has digitised into a website can now expand its business model to start selling products online (creating a new opportunity for profit) and offer audio-articles (attracting new audiences, such as those visually impaired).
Together, digitisation and digitalisation are strategies for businesses to stay relevant in the modern age. Meanwhile, digital transformation is less of a procedure and more of a consequence of these processes. Digital transformation reflects how businesses are innovating and revolutionising their industries to optimise their most valuable resources: time and money.
The promises of digital transformation are many, and those unable to keep up are either left behind by competition or going out of business altogether – a clear example is the Blockbuster video-rental business model going obsolete with the advent of video-streaming platforms such as Netflix.
Banking is also undergoing massive digital transformations. Banks are facing new customer demands and expectations that are themselves driven by the digitalisation of other industries. A recent Accenture research examined the digital disruption of Nordic retail banking and illustrates this trend well: while the banking industry has been on the digitisation path for a number of years, it was the advent of the mobile device that dramatically accelerated their digitalisation. Now, millions use apps to handle transactions, and this has changed the way people and banks interact – a digital transformation.
In the Nordic region, digital transformations are taking place in all sectors of society and encouraged by the government. As a result, the Digital Economy and Society Index (DESI), in which the European Commission tracks countries’ digital competitiveness, ranked Denmark, Sweden and Finland as the most advanced digital economies in the EU in 2018.
Unsurprisingly, the Nordic countries are amongst the most digitalised in the world. In April 2017, ministers from Nordic and Baltic regions established the Nordic Council of Ministers for Digitalisation (MR-DIGITAL) and signed a declaration committing to step up their digitalisation efforts (even further!) within their countries and across borders.
The Nordic Ministers are walking the talk. A 2018 report praised the digitalisation of the region’s public services, highlighting the resulting environmental benefits and significant cost-savings of switching paper-based communication and processes to digital.
Large-scale digitalisation initiatives such as this are possible in the Nordic Region because of the superior digital infrastructure it already boasts, in contrast to some other parts of Europe. The EU 2020 digital agenda aims to make high-speed Next Generation Access (NGA) networks available for all European households by 2020. This is already a reality in the Nordic region, where Iceland has the highest amount of households covered by fast NGA (95%), followed by Denmark (93%) – both well above the European average (76%).
Another benchmark for digitalisation is the number of people within a nation who have never been online – in which criteria the Nordic region also tops the rest of Europe – the highest figures in the Nordic areas reach a maximum of 8%, while the European average is 14%, according to a 2018 report.
99% of Norwegians are online, Denmark and Finland are the European economies with the highest rates of digital technology integration for businesses, and Sweden is the world leader in digitalisation, with the world’s highest number of connected gadgets per inhabitants. Now that the differences between digitisation, digitalisation, and digital transformation are clear, it can be said with confidence: the Nordic Region is mastering all three.
Written by Paula Magal for Nordic Cyber Series – the launching Cyber Security Summit for the Nordic Region to take place in Copenhagen, 20th-21st February 2019. Follow Nordic Cyber Series’ Newsroom and LinkedIn Showcase Page for more content like this & to learn more about the summit.