Finland leads in use of digitalisation

Finland has come out on top in the annual country comparison measuring the use of digitalisation. According to the Digibarometer survey, Finland has made particular progress in the digitalisation of companies.  

Finland knocked Denmark, which has dominated the ranking for the past few years, down to second place. In the last three years, Finland itself has been ranked second.  

The Netherlands came third in the latest survey, while Sweden and Norway dropped to fourth and fifth place respectively. China, the rising giant of the digital and data economy, which has risen from outside the top ranks in recent years, has now climbed to 7th place. Ahead of it in sixth place is its rival the United States. 

“Finland’s number one ranking is the result of steady and sustained progress in all aspects of the benchmarking, in government, business and people’s daily lives. The rise of the Netherlands and China comes as no surprise, as both countries have widely adopted digital services,” says Taru Rastas, Senior Expert at Sitra, who was a member of the Digibarometer working group. 

Finland was last ranked number one in 2016.  

The Digibarometer measures the level of digitalisation of societies. It covers 22 countries. The use of digitalisation in their public sector, businesses and citizens is examined across 36 variables. It looks at digital conditions, the use of digital solutions and their impact. Finland has made progress in all areas measured.  

Sitra has funded the 2023 survey. 

Leaps and bounds in digital business   

Looking at the results from the perspective of each area, Finland is, as in previous years, a world leader in the use of digitalisation in the public sector.   

In a comparison of digitalisation in enterprises, Finland moved up as much as four places to second place.   

But in terms of the impact of digitalisation on businesses – that is, the benefits it has brought to businesses – Finland lags behind Denmark, the Netherlands and Sweden.   

“Finland excels in creating the conditions for digitalisation. But there is a particular problem when it comes to reaping the business benefits. Nevertheless, Finnish companies consider that the use of ICT has had a significant impact on their competitiveness and that their digital transformation has been successful, so the effects may be delayed,” says Rastas. 

Mass data adoption is growing at an alarmingly slow pace   

The special topic of the 2023 Digibarometer was the use of mass data, or so-called big data, in companies. Its use in companies is still rare and the number of companies using mass data is growing very slowly.   

The leading countries in the business use of big data are the United States, China and Denmark. Finland ranks only sixth behind them.   

The survey found that while  the majority of Finnish companies use data to some extent, but only one per cent have real business models based on mass data. Use is concentrated in the ICT sectors and in large companies.   

“There are signs of productivity effects from the use of big data, but these are highly dispersed. In Finland, the share of companies using mass data is growing at an alarmingly slow rate – especially when we compare this to the development of the amount of data in Finland,” concludes Petri Rouvinen, Research Advisor at Etla Economic Research.  

Mass data is characterised by very large amounts of data, different formats and rapid availability. 

A 2022 study by Sitra study found that the projected value growth of the data market in Finland is relatively modest compared to our digital capabilities, the conditions for doing business based on digital technologies and compared to key peer countries.  

To further capitalise on Finland’s strengths, public and private sector collaboration needs to be further strengthened. This has been done, for example, through the National Roadmap for the Data Economy, led by Sitra, which helps different stakeholders to work together in building a data-driven society and economy. 

The ability to use data to improve productivity  

The study also examined for the first time the link between data utilisation and productivity.   

“Research has shown that Finnish companies that use data in their business have higher productivity rates than others. There are also productivity effects between R&D and data use,” says Rastas.   

Large companies use data more than SMEs. 

See also 

Digibarometer 2023 study