D4.4 Economic Benefits of the IMPULSE Approach - V2

This Deliverable 4.4 updates and expands Deliverable 4.3, which began the analysis of the potential economic impact that deployment of the IMPULSE eID solution might yield in specific pilot use cases. The Deliverable first reviews the relevant literature on the economics of digital identity and digital government. It then analyses the expected impact of IMPULSE in the pilot use cases explored in the project, providing quantitative estimates where feasible. Compared to Deliverable 4.3, Economic Benefits of the IMPULSE Approach, Version 1, this version considerably expands the analysis of the pilots in Peshtera, Aarhus and Ertzaintza, by: (1) analysing new and additional data provided by the pilots and by the large-scale survey (N = 740) of potential IMPULSE users conducted in Work Package 4.1, (2) estimating and considering likely future changes to population sizes in the projections and estimations of possible future economic effects of IMPULSE, (3) examining the potential and economic impact of scaling up each of these use cases to the national level (i.e., to all of Bulgaria, Denmark and Spain, respectively), and (4) for Peshtera: considering a wider application of IMPULSE than foreseen in the current piloting. Furthermore, it (5) corrects an error in Deliverable 4.3 that was only noticed after submission, namely the use of wage/salary data instead of labour cost data (i.e., including employers’ tax and insurance contributions) for certain estimations. These and other estimates are now made using labour cost data. Finally drawing on the task 4.1 survey data, this Deliverable includes (6) an additional chapter on possible economic impacts of IMPULSE in the private sector. The literature review from Deliverable 4.3 and the analyses of the Reykjavik, Gijon and Infocamere use cases are reproduced, as there was little to add to these and providing them greatly facilitates understanding the analysis presented here. The general conclusion of the economic analysis presented here continues to be that in some, though not all, use cases, IMPULSE can increase the efficiency and ease of public service provision. Where this is the case, the public administrations should enjoy modest monetary savings, largely by reducing the amount of labour (time) required to complete various administrative tasks. For citizens and residents, the main direct economic benefit of IMPULSE are time savings. Depending on the context and use case, the system may cut the time required for citizens to obtain a particular service by an hour or more. These findings are broadly in line with the extant literature, which predicts that in advanced economies, basic digital identity solutions (i.e., those that mainly offer authentication services) like IMPULSE should mainly yield modest efficiency gains. Similar conclusions apply to the private sector impacts. These are harder to assess, as the IMPULSE project did not include private-sector use cases. Thus, the analysis had to remain largely qualitative. There is reason to expect that IMPULSE could reduce administrative, compliance and security costs connected to confirming customers’ identity and resetting lost passwords. It is also likely that IMPULSE could modestly increase the consumption of online services. Larger economic gains from the implementation of digital identities are possible, but they depend on (i) making large numbers of different public and private sector use cases available via the digital identity; (ii) adding “advanced” functionalities to the digital identity system, in particular a digital wallet and/or qualified electronic signature functionality.