Economically Viable Identity Ecosystems

Prevailing digital identity solutions are facing widespread dissatisfaction, prompting political and business stakeholders to advocate for the development of novel identity (ID) ecosystems. This paper diverges from the traditional focus on the usability, security, and privacy shortcomings of current solutions, directing attention instead to the economic dimensions that are critical for the successful adoption of digital identity management (IdM) systems. The analysis extends beyond the incentives for end-user adoption, considering the roles, motivations, and ability of other key stakeholders to capture value through the ecosystem, particularly service providers, who are anticipated to be the primary financial contributors to ID services. This examination leads to the pivotal inquiry of whether a market for digital identities can materialize and what strategies for market entry could be viable, especially in scenarios involving public sector participation.