International efforts for digital conversion

Digitization is of fundamental importance for economic growth and for productivity in business and public activities. The value-creating potential accelerating digital transformation is thus considerable. At the same time, digital system solutions have great potential to contribute to green conversion and social sustainability.

In the wake of the pandemic, large gatherings of power are being made in many countries to accelerate the digital transition. During the pandemic, digital solutions have been crucial for important societal functions. Experience has shown the possibilities of digitalisation but also the shortcomings of utilizing these possibilities. The ongoing digital power gatherings are an important part of major national initiatives for economic and social recovery. For many of these, green transition and health challenges are the main drivers. Another important driving force is geopolitical strategic competition for technological leadership in the digital transformation.

The large digital powerhouses that are now being made challenge Sweden's competitiveness and innovative power. Against this background, Vinnova, Digg, PTS and VR proposed before the summer a strategic programme for Swedish power gathering in the digital structural transformation.

Vinnova 2021, Power gathering for a sustainable digitized Sweden

A strategic analysis of digital structural transformation and digital power gatherings was made in connection with this.

Vinnova 2021, Sweden's conditions in the digital structural transformation

This policy brief discusses current power gatherings in four countries - the United States, South Korea, Germany and Finland.

USA

According to I USA, civilian investments in digitalisation have increased sharply for a long time, while defense-related investments are still much larger. Within the framework of the US administration's recovery package, new very large digital powerhouses are planned. In this context, great emphasis is placed on the United States' ability to lead the development of critical and emerging technologies.

Part of the American gathering of forces is a proposal for a new directorate for technology and innovation within National Scien­ce Foundation (NSF). The original proposal for an infrastructure plan from the US administration included allocating $ 6.25 billion to the Directorate for Advanced Technology Development over eight years. For Sweden, this corresponds, in relation to population, to approximately SEK 1.6 billion annually.

However, the infrastructure plan recently approved by Congress was heavily reduced compared to the original proposals and the NSF-related initiatives, mentioned above, were not covered. On the other hand, these initiatives are included in two different bills in the House of Representatives and in the Senate, respectively, which have slightly different emphases ( NSF for the Future Act and US Innovation and Competitiveness Act).

The two chambers have each adopted their respective proposals, but they have not yet merged them into a joint bill that both can support. It is unclear when the various proposals above will be decided and finalized.

In addition to giving NSF an expanded mandate to support strategic research on critical and emerging technologies, most of which are linked to digitalisation, there is also a cross-party agreement in Congress to more directly ensure domestic manufacturing in such areas with a special focus on advanced microelectronics.

The Senate's US Innovation and Competitiveness Act's decision includes a $ 52 billion effort research, semiconductor design and manufacturing. In Sweden, in relation to population, this would correspond to approximately SEK 15 billion.

South Korea

I Sydkorea is making a very large digital pool of energy for the development and application of digital key technologies, data sharing and to solve major societal challenges. South Korea's investments in digitalisation are under the headings Digital New Deal and Digital Green Deal. For the period 2020–2025, a total of the equivalent of SEK 334 billion will be allocated to twelve large mission projects within the framework of Digital New Deal. This corresponds to a total of SEK 64 billion in Sweden, in relation to population, ie. just over SEK 10 billion per year. In addition, investments are being made in eight major mission project within the framework of Digital Green Deal.

Germany

In June 2020, Germany launched a major Future Package for the period 2020–2025 totaling just over EUR 50 billion. This corresponds to approximately SEK 60 billion in Sweden, in relation to population, ie. about SEK 10 billion per year. One third of the future package is focused on digital structural transformation, which corresponds to approximately SEK 3.3 billion per year in Sweden for the same period.

Important priorities made in the future package to accelerate the digital structural transformation apply to research and development in the areas of 5G and 6G, artificial intelligence and quantum technology. Other priorities are investment support for digitalisation in the public sector and in small and medium-sized enterprises, as well as the expansion of 5G networks and project for smart cities.

Tysklands Zukunftpaket

Finland

I Finland launched in 2020 powerful and focused efforts on digitalisation, including financing, through Business Finland, the four major companies led project, each with approximately 20 million euros over four years. The purpose of the investments is to strengthen digital transformation in important ecosystems for innovation. The Finnish investment corresponds to approximately SEK 1.5 billion in Sweden, in relation to population.

The focus for the four projects is in line with important Swedish areas of strength - industrial 5G networks, integrated technology platforms for optimal power generation and energy use, sustainable mobility solutions for urban environments and electronic and digital solutions for heavy machinery.

Nokia, ABB, Kone and Sandvik, who each lead their project, have formulated roadmaps for the development of innovative ecosystems in Finland in each area and for their own funding in this context. Business Finland has allocated more than EUR 30 million over five years to other companies or research organizations for the project which is in line with the roadmaps for the four projects.

In 2019, a large and long-term effort launched in Finland on ten eight-year-old flagships for research with a societal impact in close collaboration between universities and companies. Four of these are directly relevant to the digital transformation: 6G, artificial intelligence, digitally based cancer treatment and photonics.

These four flagships have an estimated total turnover of approximately EUR 1,200 million spread over eight years. These are jointly funded by the Academy of Finland, participating universities and companies. The total public financing is estimated to amount to about 20 percent of the total turnover.

The size of this digital flagship investment in Sweden, in relation to population, would correspond to just under SEK 23 billion over eight years, of which approximately SEK 4.5 billion in public funding. Annually, the total turnover in Sweden would correspond to approximately SEK 2.8 billion, of which just under SEK 600 million in public funding.