University of Economics, Prague Faculty of Informatics and Statistics
COMPARISON OF THE E-GOVERNMENT SERVICES SUPPORTING DOING BUSINESS IN PORTUGAL AND
ESTONIA MASTER THESIS
Study programme: Applied Informatics (ISM) Field of study: Information Systems Management
Author: Francisco Pereira Supervisor: Ing. Jan Kučera, Ph.D.
Prague, May 2020
Declaration
I hereby declare that I am the sole author of the thesis entitled “Comparison of the E- Government Services Supporting Doing Business in Portugal and Estonia“. I duly marked out all quotations. The used literature and sources are stated in the attached list of references.
In Prague on ... Signature
Student’s name
Acknowledgement
I hereby wish to express my appreciation and gratitude to the supervisor of my thesis, Ing.
Jan Kučera, Ph.D., who has the substance of a genius: he convincingly guided me and encouraged me to be professional and do the right thing, even when the road got tough.
Without his persistent help, the goal of this project would not have been realized.
To the memory of my stepfather, João, who guided me through my academic path and played a significant role on my personal development. To my mother, Maria João, who plays an
Abstract
The subject of the presented master thesis is E-Government and a concrete comparison between the countries of Portugal and Estonia. The main aim of this study is to explore the current E-Government services supporting starting and managing a business in Portugal, a country that is growing its public presence online, and compare the experience with the same services available in Estonia, a country distinguished by its digital services. To achieve this aim, the author divided the work to fulfil three primary objectives: describe the existing E- Government services in Portugal and Estonia, compare the E-Government services for businesses in Portugal and Estonia, and evaluate how much it costs and how long it takes to register a company in Portugal and Estonia, using the E-Government services. To achieve the first objective, the researcher collected and analyzed data from official governmental sources to compile the current state of the E-Government in both countries. The second stage focused on comparing the data compiled in the first objective, along with the performance of an action research approach in which the author went through the process of starting a business in Portugal and compared it with the experiences of other entrepreneurs who went through the same process. Lastly, the data collected in the previous objectives was compiled in a comprehensive way to objectively compare the costs and time-consumption of this process in Portugal and Estonia. Based on the collected testimonies and experiences, the author that Portugal can learn from Estonia that the investment in this field brings a lot of benefits, and the current infrastructures in the country have to be improved, although these infrastructures are in place to become a successful case of E-Government if the right adjustments are made.
Keywords
E-Government, Digital Government, E-Governance, E-Services.
JEL Classification O35, O36, O38
Content
1 Introduction ... 7
1.1 Aims and Objectives ... 9
1.2 Assumptions and Delimitations ... 9
1.3 Thesis Structure ... 10
2 Literature Review ... 11
2.1 Relevance of the topic ... 11
2.2 Research of academic works ... 11
2.3 Research of Official Sources ... 12
3 Approach and methods ... 14
4 E-Government ... 16
4.1 What is E-Government? ... 16
4.2 Types of E-Government ... 16
5 E-Government in Portugal ... 18
5.1 History ... 18
5.1.1 Programs of Portugal Digital ... 19
5.2 Current E-Government Services available for Businesses ... 21
5.3 Maturity and Usage ... 25
6 E-Government in Estonia ... 28
6.1 History ... 28
6.1.1 X-road ... 29
6.1.2 E-Residency ... 30
6.2 Current E-Government Services available for Businesses ... 30
6.3 Maturity and Usage ... 33
7 Comparison of the E-Government services in Portugal and Estonia ... 37
7.1 History ... 37
7.2 Current E-Government Services Available ... 38
7.3 Maturity and Usage ... 40
8 Starting a business in Portugal: first-person experience ... 41
... 42
8.1 First steps ... 43
8.2 Authentication ... 43
8.3 User Registration ... 43
8.4 Company Electronic File ... 44
8.5 Name of the company ... 44
8.6 Request Firm ... 44
8.7 Headquarters, Social Purpose, and CAE ... 45
8.8 Information about the company ... 46
8.9 Partners identification ... 46
8.10 Arbitration Centre Membership ... 47
8.11 Social pact review ... 47
8.12 Documents’ signing and uploading ... 47
8.13 Payment ... 47
8.14 Findings ... 49
9 Interviews ... 52
9.1 Estonia ... 53
9.1.1 First level ... 53
9.1.2 Second level ... 56
9.1.3 Third level ... 58
9.2 Portugal ... 59
9.2.1 First level ... 59
9.2.2 Second level ... 61
10 Discussion ... 63
10.1 Time and Costs ... 65
10.2 Recommendations ... 66
10.3 Limitations ... 67
Conclusion ... 68
List of references ... 70
1 Introduction
We live in times of unprecedented technological growth, with no tendency to slow down.
The use of ICTs helps individuals, businesses, and organizations making their lives easier and better. The integration of ICTs into the processes of every organization is essential nowadays, as productivity gains in other sectors have been achieved, to a large extent, through the implementation of ICT-related innovations (Anttiroiko, 2007). Information technologies keep improving and evolving every day, and not keeping up with the latest developments can doom an organization to obsolescence. In fact, embracing technology as part of an organization’s routine is the way to take advantage of the opportunities it develops constantly, as it is not the strongest of the species that survives, nor the most intelligent that survives – it is the one that is the most adaptable to change (Darwin, 1809–1882).
Public authorities are no exception to this. The use of technology is essential to fight the administrative and regulatory burden, as ICT-based solutions can reduce considerately the time consumption, search, and coordination costs associated with traditional bureaucratic procedures to governments (Nijsen et al., 2009). Information technologies are already broadly used by countries all around the world, and governments should be role models of leadership and improve the utilization of ICT in all the governmental departments in order to improve the efficiency of governmental services and motivate ICT industries (Abu- Ghazaleh, 2000).
The name of the game is E-Government: where the information technologies meet the government. It is common to mistake the terms E-Government and E-Governance. E- Government or digital government (used synonymously), can be described as “government- owned or operated systems of information and communications technologies (ICTs) that transform relations with citizens, the private sector and/or other government agencies so as to promote citizen empowerment, improve service delivery, strengthen accountability, increase transparency, or improve government efficiency” (World Bank, 2001). E- Governance, E-Democracy or Digital Governance, on the other hand, is defined by UNESCO as “the public sector’s use of information and communication technologies with the aim of improving information and service delivery, encouraging citizen participation in the decision-making process, and making government more accountable, transparent, and effective. E-governance involves new styles of leadership, new ways of debating and deciding policy and investment, new ways of accessing education, new ways of listening to citizens, and new ways of organizing and delivering information and services. E-governance is generally considered as a wider concept than E-Government since it can bring about a change in the way citizens relate to governments and to each other. E-governance can bring forth new concepts of citizenship, both in terms of citizen needs and responsibilities. Its objective is to engage, enable, and empower the citizen”.
Many are the reasons to enhance the digital transformation of public services: when well implemented, E-Government enables all citizens, enterprises, and organizations to carry out their business with the government more easily, more quickly, and at a lower cost (Reding, 2006); can be helpful in curbing the corruption in public administration (Ionescu, 2015);
improves the citizen’s trust in the government (Welch, 2004); or can even bring value to small firms (Viana Thompson, Rust and Rhoda, 2005).
Estonia has been distinguished many times for its digital government strategy. The country scored 0.85 in the E-Government Development Index in 2018 (United Nations, 2019), making it the 9th most advanced country in this ranking, and more than 90 points on the Digital Public Services for Businesses indicator in 2018 (European Comission, 2018). Titled by The New Yorker as the Digital Republic, Estonia’s investment in the digital transformation of its government is so noticeable that it turned it Virtual, Borderless, Blockchained, and Secure (Heller, 2017). The trigger to this case study was in 2014, when Estonia introduced the innovative e-Residency program. This pioneering initiative allows people from all over the world to become digital residents of Estonia. The country of Estonia has a population of roughly 1.3 million people. However, due to the e-Residency program, the population expected to grow by 600% in the next decade, up to 10 million (Anthes, 2015). Although the buzz is recent, Estonia has always been driven by innovation. The Digital Government powerhouse rests on two main cornerstones, both introduced in 2001:
X-Road and the Compulsory Digital ID (Kalvet and Aaviksoo 2008; Kalvet 2012; Margetts and Naumann 2016). X-Road is a “free and open-source data exchange layer solution that enables organizations to exchange information securely over the Internet” (X-Road® Data Exchange Layer, 2020), and it is the backbone of e-Estonia allowing the different public and private sector information systems to connect and work in harmony. It is the prime platform for interoperability, as it enables data exchange and identification of the actors in a secure way, the platforms‘ structure and architecture. The Digital ID, on the other hand, is he digital footprint of each user, which identifies the user and makes it possible for them to sign documents. (Hart and Compton, 2019)
Portugal, in turn, has only recently started to develop this kind of services. Although the Portuguese E-Government still has a long way to go, it is undeniable that the future is bright and the steps taken up until now have been effective. Reflective of that is the EGDI of 0.8031 in 2018, making 29th of the world ranking on this topic (United Nations, 2019). The main challenges for Portugal are making the digital government focused on citizens, businesses, and social actors and reconfiguring the interactions between the public administration and the other actors, as this starts pushing deep operational reforms in many different public domains that are too hard to implement (Fernandes and Barbosa, 2016). Currently, the main player of the digital shift in Portugal is the Administrative Modernization Agency (AMA).
Established in 2007, AMA is the public institute that strives toward administrative simplification, public service delivery, and digital transformation. The landmark of simplification was the Simplex program, launched in 2006 and then reformed in 2014, which main goal was to provide a better and simpler framework for the creation and operation of new business opportunities, as well as simplify many different legal and normative procedures. In terms of public service delivery, the goal is to expand the points of interaction between citizens and government through a large network of digital assisted touch points in many different public spaces, titled the Aproximar (after the Portuguese word for getting closer) Program (AMA, 2020; Fernandes and Barbosa, 2016). Along with this, the most noticeable “faces” of the E-Government measures in Portugal are the integrated Citizen Card launched in 2007 and complemented in 2014 with the Digital Mobile Key, which played an important role in the identification and authentication of a citizen on ePortugal, the Portuguese portal for digital services (ePortugal, 2020). The next step is the creation of an e-Residency program similar to the Estonian one, already announced by the Prime Minister António Costa in 2019, and now incorporated on the State Budget for 2020. (Ministry of Economy, 2019)
1.1 Aims and Objectives
The main aim of this diploma thesis is to explore empirically the current E-Government services supporting starting and managing a business in Portugal, a country that is growing its public presence online, and to compare the experience with the same services available in Estonia, a country distinguished by its digital services. This goal can only be achieved if the definition of the outcomes of the research is stated. Therefore, the objectives of this master thesis can be classified into three stages:
• Describe the existing E-Government services in Portugal and Estonia;
• Compare the E-Government services for businesses in Portugal and Estonia;
• Evaluate how much it costs and how long it takes to register a company in Portugal and Estonia using the E-Government services.
These objectives are the steps taken to achieve the desired outcome. They are ordered according to the most logical approach to sustain and align the outcomes of the research with the aim of the master thesis.
1.2 Assumptions and Delimitations
The empirical results reported herein should be considered in light of some delimitations.
The sample size of this study is insufficient for statistical measurement, therefore not enough to draw significant conclusions of the effectiveness of the E-Government services provided by the countries of Portugal and Estonia.
This means that the research conducted was based only on a few occurrences and that these are not representative of the whole universe that went through the same experience, focusing more on qualitative research rather than quantitative. Furthermore, the experience does not cover all the possible business legal structures, nor all the digital services for businesses available on both countries, rather a small amount of them with special focus on the creation of a business.
The scope of this research was defined following two main factors: the country where the first-person experience took action, Portugal, was chosen based on the knowledge of the mother tongue of the researcher and the general intent to move the business to the location;
and Estonia, based on the general knowledge of the country’s policies and measures regarding E-Government, especially the e-Residency program.
In addition, the time of the research was not sufficient to gain significant insights regarding all the interactions a business has with the E-Government, nor were qualified observations of other countries gathered for further comparison. Therefore, the researcher opted by focusing on services for starting up a business.
1.3 Thesis Structure
This master thesis has been broken down into ten main chapters and, subsequently, divided by context into further subtopics. The thesis structure is as follows:
• Literature review – chapter two
• Methodology – chapter three
• Theoretical approach – chapter four
• Practical approach – chapter five to nine
• Discussion – chapter ten
The second chapter includes the comprehensive literature review, where it is presented different approaches to reveal the relevance of the topic and define the main information sources for the main content of this research.
Chapter three focuses on the methodological part of the study, where it is discussed the approach and methods selected to formulate the work developed in this thesis, as well as an explanation of the type of research conducted.
Chapter four includes the theoretical approach to the topic, focusing on what exactly is E- Government and what are the different types of its services.
From chapter five to chapter nine, it is presented the practical part of the study. Chapter five and six present an overview of the current state of the E-Government in Portugal and Estonia, focusing on the history, the current services offered, and the maturity and usage of these.
Chapter seven is devoted to comparing the services provided in both countries currently. The first-person experience of the process of starting a business in Portugal can be found in chapter eight, while the interviews made for further comparison are located in chapter nine.
Chapter ten is dedicated to describing the findings and outcomes of the study performed, as well as discussing the recommendations drawn from this. Lastly, the conclusion assesses the thesis aim and the objectives based on the criteria.
2 Literature Review
2.1 Relevance of the topic
The first propelling reason driving the topic of this research was the researcher’s intent to start a business, which, given the circumstances, would have to be done through the online channel. The verification of the relevance of the topic was done through the researcher’s quest for relevant action researches regarding the topic of E-Government in terms of starting and managing a business. Through this verification, the author reached the conclusion that most of these studies were conducted from a strategic or technical point of view, ignoring the target user of these services – the entrepreneur.
2.2 Research of academic works
Specific and deep search was conducted by the researcher, and many are the researches around the E-Government topic in general, however, there is a lack of in-depth analysis regarding the user’s point of view, and none queries for action research were matched. The information here will be of value to developers of the E-Government infrastructures in the countries in study, as well as future studies conducted in the strategic implementation of E- Government services in other countries out of the scope of this research.
In the first stage, the research was executed in the Google scholar database, a Google web search engine for scholar literature such as online academic journals and books, theses and dissertations, etc. Web search commands were used to make sure the searches displayed accurate results, such as intitle (intended for a term the search should display in the title of the result), quote marks (intended to display an exact match) or logical commands such as
“AND” or “OR” to include semantics and synonymous.
Table 1 Results of the academic works research. (Data obtained from scholar.google.com and analyzed by the author)
As displayed in table 1, there is already a significant amount of studies conducted in the Digital Government field. However, narrowing it down to the two countries on scope, Portugal and Estonia, the number of results obviously shorts down. Despite the overall success of the E-Government in Estonia, the search revealed there are actually more studies on the Portuguese case. Furthermore, it was visible that action research studies in Portugal are inexistent, as well as studies that directly include Portugal and Estonia as their main topic. This is the key point on which this thesis focus: the actual experience of these services.
The lack of studies including first-person experience is noticeable and a gap in this topic.
Thus, the consultation of some of the academic work related with the topic was done in order to have better background knowledge of the best practices and expectations of how the processes should be conducted. The sources consulted include both academic and official governmental resources.
2.3 Research of Official Sources
E-Government is intended for public use. The nature of the topic implies nations all around the world discuss and debate the best practices, and the developments in this area are of the best interest of everyone. Therefore, the digital government is a topic discussed in many international and national governmental organizations and generates a huge amount of information in terms of studies and researches from many different, so to say, official Search terms Type of academic work Results returned
E-Government Any 292.000
Thesis 32.900
E-Government Estonia Any 282
Thesis 82
E-Government Portugal Any 311
Thesis 50
Action Research E-Government Portugal Any 0
E-Government Portugal and Estonia Any 0
sources. Many of these sources were used in this master thesis, aiming to deliver the most trustworthy and reliable content possible.
In general, most of the information about E-Government is public, and governments engage the population with insightful content around this topic. The websites of both Portuguese and Estonian governments provide useful information. In Portugal, the information is dispersed across the online channels of the multiple ministries. Although ePortugal is the
"digital face" of the Portuguese government, the portal is not the centralization point of the information about the digital government. The Portuguese Administrative Modernization Agency (AMA), responsible for the "digital shift" in Portugal, also provides limited information. Estonia, on the other hand, has e-Estonia as the main source of information regarding its digital government, besides the Estonian Government Information Portal that is intended for the use of the online public services only.
Internationally, many organizations address this topic. The European Commission’s National Interoperability Framework Observatory (NIFO) releases, every year, the "Digital Government Factsheets" for every country of the European Union. These factsheets intend to monitor the development of Digital Government in Europe, aiming to become a prime source of this topic. The digital factsheets give a detailed picture of each country's policies and developments in digital government-related matters. Other global organizations referenced in this research, such as UNESCO, the World Bank, the United Nations, etc, also provide information about E-Government and are undeniably reliable sources of information in this area.
3 Approach and methods
Research in a common parlance refers to a search for knowledge. One can also be define research as a scientific and systematic search for pertinent information on a designated topic.
Thus, it is essential to define the work methodology, helping the researcher to compile more meaningful, useful and valuable work, and entitle the reader to an overview of how the research was conducted.
Figure 1 Thesis Methodology. (Author)
Figure 1 describes the thesis methodology chart. It represents the sequence of steps performed in the elaboration of the thesis for achieving the desired goals. In-depth literature review is the foundation of the thesis work, for it provides significant background knowledge on the topic of E-Government while preparing the researcher and the reader for diving in the subsequent analysis.
Research is the following step. It was divided in two stages: the first-person experience and the qualitative research analysis. The first stage consists of a detailed, meticulous description of the experience underwent by the researcher while trying to establish and manage a business in Portugal using the online services. The second stage focuses on the collection of qualitative data regarding the same experience of other individuals. The collection of this data served the purpose of cross-checking experiences, gathering insights about the different experiences, comparing the processes in both countries, and covering other unexplored processes by the first-person experience.
The last stage before drawing conclusions is the analysis of the collected data and detailed comparison of it, with the aim of extrapolating meaningful and founded conclusions from the public digital services of both countries.
Introduction Literature
Review Research
First- Person Experience Qualitative
Research Analysis
Discussion Conclusion
The research approach influences design and provides an opportunity to assess the advantages and limitations of various approaches a researcher can adopt (Creswell and Poth, 2016). This master thesis uses a mixed approach. The main method is action research, focusing on the first-person experience of the researcher on starting a business in Portugal.
However, the collection of data for purposes other the researcher's experience is part of an inductive research approach.
4 E-Government
The 21st century brought a technology boom to humanity. Every day, the world is presented with new developments, to a point that “once a new technology rolls over you, if you are not part of the steamroller, you are part of the road” (Stewart Brand). Public authorities are not an exception, and as far as they are concerned, they do not want to be part of this “road”.
Information technologies drastically changed the means governments use to communicate with citizens. The mix of different technologies such as cloud computing, ever-smarter mobile devices, and collaboration tools is bleeding into public authorities landscape (Johnson, 2014). From the government side, this comes both as an opportunity and a challenge: delivering better services at a lower cost and be ready to deliver and receive information in digital form (Goodman and Farrell, 2013).
It is this change in the way the government communicates with its citizens that is leading to a new term: E-Government.
4.1 What is E-Government?
Many are the different definitions for what E-Government is since the term has now become a buzz word and is used in a broad sense. The World Bank has provided this definition of E- Government in an issue note about the topic:
“government-owned or operated systems of information and communications technologies (ICTs) that transform relations with citizens, the private sector and/or other government agencies so as to promote citizen empowerment, improve service delivery, strengthen accountability, increase transparency, or improve government efficiency.” (World Bank, 2001)
With the technologic developments of the ICT, the traditional communication between the government and the citizens or organizations that took place in a public office has now shifted to a service center closer to its final user. Countries have realized the opportunity to fill the gap between their relationship with the citizens by reshaping the public sector (Panzardi, 2002). The main goal of the E-Government is to transform the way government and society communicate in a positive way in terms of responsiveness, accessibility, transparency, responsibility, participative, efficiency, and effectiveness (Veit and Huntgeburth, 2014).
4.2 Types of E-Government
E-Government is a spectrum of different ways the government communicates or interacts with the different actors of society. There are many references to different scopes of E- Government, however, the most common ones include the interactions between government
and citizens (G2C), government and business enterprises (G2B), government and employees (G2E), and interagency dealing (G2G). (Gottschalk and Solli-Sæther, 2009).
Figure 2 Types of E-Government (Alharbi et al., 2014)
5 E-Government in Portugal
5.1 History
Portugal gave its first steps in the Digital Government path in 1991. With the establishment of the Secretariat for the Administrative Modernization came the launch of INFOCID, the first version of the Public Administration website. The goal of this portal was to bring the public authorities closer to its citizens, providing valuable information about rights and duties. (Cardoso, n.d.)
Over the years, many have been the developments of the Portuguese Digital Government, with the main one being in 2006 with the launch of the Simplex program and, consequently, the "Empresa Online" portal. The portal was, at the time, an innovative solution that allowed any citizen to start a business through the public online services. Nonetheless, the modernization plan now has different goals. The action plan for the E-Government services for business in Portugal is part of a general plan called “Portugal Digital”. This plan was designed to become the powerhouse of the social and technological mindset shift in Portugal through the digital qualification of the general population, the businesses, and the public system itself. (Government of Portugal, 2020).
Figure 3 Main Portugal Digital Milestones in Portugal. (Fernandes and Barbosa, 2016)
Portugal Digital has the following drivers:
1. Regulation, cybersecurity and privacy;
2. Circular Data Economy;
3. Connectivity and infrastructure;
4. Disruptive Technologies;
5. Alignment with the European Digital Strategy;
6. Communication and Promotion.
The action plan is divided into three cornerstones: the development of an information society, the digital shift of the business framework, and the digitalization of the public system. The last two pillars are the ones who directly impact the business, and each one of them has three catalyzers:
Digital Shift of the business framework:
• Entrepreneurship and investment attraction;
• Business framework, focusing on SME;
• Transfer of scientific and technological knowledge to the economy.
Digitalization of the public system:
• Electronic Public Services;
• Agile and open Central Administration;
• Open and connected regional and local administrations.
5.1.1Programs of Portugal Digital
Portugal Digital is the aggregated form of network of action plans and projects, all with the goal of the digital transition of the country economic, social and administrative wise. The project includes over 18 programs and national strategies, and over 1031 initiatives.
Focusing on the ones impacting directly the business life, the digital shift of the business framework and the digitalization of the public system:
Business framework Portugal InCoDe.2030
InCoDe.2030, Iniciativa Nacional Competência Digitais e.2030 (“Digital Competences National Initiative”), was launched in 2017 to promote and improve the digital skills of the general population. These skills are essential for every citizen and stimulate employability by giving response to the constant digitalization of the market. An active and more qualified population will give place to new ways of work, new jobs, new markets and innovative products, and, consequently, more active and competitive economical activities.
StartUP Portugal
The program was created in 2016, with the mission of promoting the creation and development of innovative enterprises. This initiative includes investment programs with public funds, an incubation center, business accelerator and many more. The final goal is to create an active technological ecosystem with a growing importance for Portugal's economic development.
Indústria 4.0
Indústria 4.0 is the Portuguese strategy to develop industry in the digital area. Launched in January of 2017, the aim is to put Portugal at the forefront of the 4th Industrial Revolution by focusing on 3 axes: digitalization, innovation, and training. This program’s goal is to leverage for the accomplishment of a convergence decade of the European Union.
Comércio Digital
Comércio Digital (“Digital Commerce”) is a program intended for micro, small and medium enterprises of the retail, and services industry to mobilize the digital shift of their businesses by offering incentives and access to funds.
Norte Digital
Norte Digital (“Digital North”) is a project intended to help the SMEs located in the north of Portugal to strengthen their presence in the digital economy and the ecommerce by providing content and information concerning this sector and making scientific studies in these fields.
Digitalization of the public system
Simplex
The Simplex program was launched in 2006 as a public administrative modernization strategy for the Government and the public services. Many different measures were taken to simplify these services between the years of 2006 and 2011 with positive impacts on the lives of citizens and business such as the ID card, the “empresa na hora” program (“company in an hour”), the company’s simplified information (for accounting purposes) and the zero license program (a program to reduce the bureaucracy in certain business areas). In 2016 the program was relaunched as a unique national program with the main goal of making life for citizens and businesses easier in their interaction with the public services, contributing to a more competitive economy and a more inclusive society.
TIC 2020
TIC 2020 (“ICT 2020”) is a strategy plan to make the digital transformation of the Public Administration, being the ICT the main catalyzer of its modernization. Its main goals are:
make the digital services simpler, more accessible and more inclusive, fortify the use of these services by citizens and businesses, and ensure the sustainable development of the digital shift.
Catalyzers of the digital shift in Portugal
Estratégia Nacional de Segurança do Ciberespaço
The National Strategy of Cybersecurity was approved in 2019 and its main goal is not only to ensure the protection and safety of the national infrastructures and the vital information services, but also stimulate a free, safe, and efficient use of the cyberspace by every citizen, business, and public and private entity.
Advanced Computing National Strategy
This strategy drafted by INCoDe.2030 was created to define goals, objectives and measures involving the industry, college education, and investigation centers to make Portugal a European staple in terms of advanced computing.
AI Portugal 2030
Along with INCoDe.2030, and in cooperation with cooperation with the Portuguese Science and Technology Foundation (FCT), the Portuguese Innovation Agency (ANI), Ciência Viva, and the Portuguese Agency for Administrative Modernisation (AMA), this strategy aims to make Portugal part of the centers of excellence network on AI by the end of 2030.
5.2 Current E-Government Services available for Businesses
Currently, Portugal offers a total of 24 online services. These services are divided into 5 categories as the Portugal Digital Factsheets in 2019 divided: intellectual property, taxation, selling in the EU, and dealing with customers (Portugal Digital Factsheets, 2019). It is important to bear in mind the number of services is not necessarily correlated with the technological development of the E-Government services. The bureaucracy of the administrative processes should be taken into account, as it affects the number of processes an individual has to go through in order to complete one operation.
Intellectual Property
• Intellectual property
In the Portuguese Institute of Industrial Property website, intellectual property processes’
information is freely available. The institute offers online services such as intellectual property search online and registration of trademarks, patents, and designs. In addition, the
digital library provides access to the legal information regarding activities of protection and maintenance of industrial property rights and related topics.
Start-Ups, Developing a Business
• Entrepreneur’s desk
Conducted by the Administrative Modernization Agency, this service aims to aid entrepreneurs in creating and managing their economic activities and obtaining information regarding the lifecycle of their company.
• Registration of a new company
Part of the entrepreneur’s desk, “Empresa Online” (in English, “Online Company”) is a service that carries out the concept of a new business online set up in, as declared, less than an hour. Legal procedures and administrative formalities are completely covered during the user’s journey, as well as advisory services like business simulators and mobile telephony comparisons.
• Permanent business certificate (PBC)
The permanent business certificate is an online service that allows any entity registered in the Information System of Commercial Registry (SIRCOM) database to have an online permanent certificate. In this way, no public or private entity can demand a paper version of this document.
Taxation
• Electronic invoicing (eInvoice)
Managed by the Ministry of Finance and Public Administration and the Tax and Customs Authority, eInvoice enables electronic communication and conference of invoices for both consumers (in order to verify and register invoices issued to them and other related features such as income tax deductions) and traders (to send and consult SAFT-PT files, collect, and check invoices and access services to help their compliance efforts).
SAFT-PT files - The Standard Audit File for Tax Purposes - Portuguese version (SAFT-PT) is a standardized XML file used for exporting the accounting information of a company to the tax authorities. (Oracle, n.d.)
• VAT: declaration and notification
Available since February 2018, several fields of the VAT tax return are available and are automatic pre-filled by the Portuguese Tax and Customs Administration. Currently, this service is being reviewed to expand to different fields and subset of eligible VAT taxable persons.
• Corporate tax: declaration and notification
Like the Personal Income Tax, the Corporate Income Tax (IRC) returns must be filed by the taxpayer. After the assessment of the tax return is made, the taxpayer is notified electronically with the amount of tax due for payment. Currently, there are still exceptions to the electronic notifications that are issued in paper format, although these are being reviewed so the process becomes completely digital.
• Customs declarations (e-customs)
This service intends to facilitate the filling for customs operations.
• Duty free online reimbursement
Since mid-2018, all the reimbursements of VAT to travellers from outside the European Union are done through the E-Taxfree Portugal program. The certification process of the goods bought by individuals who are entitled to the VAT reimbursement can be done through electronic Kiosks located in all Portuguese Airports.
Selling in the EU
• Public procurement/eProcurement (public framework agreements)
The platform BASE serves as a public procurement portal, where all notices and contracts’
announcements are published, as well as all eTendering platforms (intended for public framework agreements).
• eInvoicing
With the same features of the eInvoice service, eInvoicing is the platform for public contracts.
• AICEP Portugal Global – Trade and Investment Agency
Managed by the Central Government and the Ministry of Foreign Affairs, AICEP’s main goal is to encourage foreign companies to invest in Portuguese enterprises, contributing to their expansion and internationalization process and export activities. This government business entity works as a “one-stop-shop” agency for investors.
• PortugalExporta
The year of 2019 was marked by the launch of PortugalExporta portal, to aid Portuguese enterprises in their export activities. The registration process is simple and provides the user access to valuable information and tools to foster internationalization.
• Portuguese legislation – Gazette online
The Official Gazette published and regularly updated online.
• Being a worker in the public administration
Separated into 3 main segments (starting, performing and terminating functions), DGAEP offers all the information for public employees to apply or be admitted, perform and/or leave a job position in public administration.
• Registration with the Social Security Regional Centre
Admission of new employees has to be communicated to the Portuguese Social Security services, and it can be done either by paper version or electronically through the Portuguese Social Security website.
• Password in time
First-time registration and password recovery service in the Portuguese Social Security.
• SIGA
SIGA (Information System for Service Management) is an online scheduling service for the public services. The goal of this service is to achieve better time efficiency and easier access to citizens and enterprises to many different services related with Social Security.
• Social contributions for employees
Online declaration and payment of employees’ social contributions.
• Health and safety information portal
The Authority for Working Conditions’ website lists all the information regarding the safety and health at work legislation. In addition, the portal contains many online features such as a compensation simulator calculator.
• Commercial and industrial norms
All the information regarding economic and food safety is available in ASAE’s website (the authority for this surveillance). Reporting infringements can be done on the portal through form filling.
• REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals, EU Regulation no 1907/2006) Helpdesk
User helpdesk area and information center managed by the Directorate-General for Economic Activities.
• Environment-related permits (incl. reporting)
Online service for electronic environment-related permits delivery such as case handling, decision, and delivery of a standard procedure to obtain a permit. All regulations and obligations customized and segmented by sector and size are also available in this specific portal.
Dealing with Customers
• Solving disputes with customers
Coordinated by the Consumer Directorate-General (DGC), the European Consumer Centre (Portugal) is the national point of contact for the online dispute resolution platform (ODR platform).
5.3 Maturity and Usage
Still having a long way to go in terms of e-services development and cultural acceptance of the technological advance these carry, Portugal keeps pursuing the best version of the digital transformation of its public services. Internet usage for interacting with public authorities is, as displayed in the table, far from being considered common practice. The peak of interaction with Portuguese e-services was in 2017, when all Internet usage for interacting with public authorities’ metrics reached their highest values. During that year, 46% of individuals interacted with online government services while 42% used the Internet to obtain information from public authorities’ websites. When it comes to downloading official forms, 29% of individuals performed this activity and 32% submitted completed forms.
Table 2 Individuals using the Internet for interacting with public authorities in Portugal. (Eurostat Information Society Indicators, 2020)
In general, all of these metrics did not follow the growing tendency they had until 2017, and by comparing it to the latest updated data from both Portugal and the EU-28’s average, it is possible to reach the conclusion that, if change is not embraced, the gap will only keep increasing. (Eurostat Information Society Indicators, 2020)
2014 2015 2016 2017 2018 2019 EU-28 average 2019 Internet use: interaction with public
authorities (last 12 months) 41 43 45 46 42 41 52 Internet use: obtaining information from
public authorities web sites (last 12
months) 38 40 42 42 36 35 44
Internet use: downloading official forms
(last 12 months) 25 24 25 29 21 22 31
Internet use: submitting completed forms
(last 12 months) 29 28 29 32 30 30 34
Further on, from the analysis of the table above, we can see the reasons why Portuguese people do not use the E-Government services provided: besides the obvious reason of not having the need to fill and submit official forms to public administration organisms either via online or in-person (72.5%), the study identifies the main reason why individuals do not do it is because of the lack of skills or knowledge, backed up by 7.6% of the qualified audience. Nearly 4.7% of the individuals do not submit these forms due to concerns about the protection or security of personal data. (Statistics Portugal, 2020)
Nevertheless, the future looks promising, as Portugal’s digital agenda for 2020 shows a lot of different plans for improvements of the current platforms and the creation of new ones, with a special focus on the e-residence program already available in Estonia. In fact, this new infrastructure promises to bring more harmony between the individuals and the public e-services, if well performed. The current service, “Empresa Online”, has many restrictions for foreigners and an electronic residence program will be a key tool for this. Since its start in 2006 and until September 2017, “Empresa Online” has been responsible for creating 97.837 companies (Ministry of Justice, 2017). In January 2018, Portugal reached the highest number of enterprises created online in just one month, with 2.308 companies that used the “Empresa Online” service, adding up to a total of 16.072 businesses. (Government of Portugal, 2019)
Table 3 Proportion of persons aged between 16 and 74 years old who did not have filled nor sent official forms over the internet for public administration for private purposes in the last 12 months (%) by Reason. (Statistics Portugal, 2020)
Figure 4 Number of companies created through the "Empresa Online" portal by month. (Government of Portugal, 2019).
6 E-Government in Estonia
6.1 History
The Estonian E-Governance project is too bright to spare introductions. Many have been the titles given to the country, as “The Digital Republic”, “The World's Most Advanced Digital Society” or “Europe's Silicon Valley”, due to the high investment and resources spent to always be a step ahead in this field. A country with a population of nearly 1.4 million people has become a worldwide example in terms of digital public services by creating a safe, convenient, and flexible digital ecosystem.
This digital adventure started in 1994 with the first draft of the “Principles of Estonian Information Policy”, which consisted of a strategic outline for the ICT development of the country. Two years later, the establishment of the first country-wide IT infrastructure came and already Estonia was leading the Digital Development Index ranking at the time. Later, the main milestones of the e-Estonia were the launching of X-Road in 2001, the e-Residency program in 2005, and the introduction of online voting in 2014. (e-Estonia 2020)
Currently, the country states that these E-services are only not possible for marriages, divorces, and real-estate transactions. Estimates show Estonia saves more than 844 years of working time annually due to this. These developments not only reflect on the built trust in its digital society but also created a safe and welcoming environment for entrepreneurs all around the world, directly impacting the economy of the country. (e-Estonia, 2020)
Figure 5 Timeline of Estonia's E-Government. (e-Estonia, 2020)
6.1.1 X-road
X-Road is the name of the cornerstone of e-Estonia. Started in 2001, X-Road is a data exchange platform that allows data from all the public and private entities’ data to link up and function in harmony. This does not mean the government owns a centralized or master database of all these entities: rather that data is stored where it is created, meaning, each party administrates their data separately, keeping it from being duplicated and allowing X- Road to operate as a centrally managed, distributed Data Exchange Layer between information systems. (Anthes, 2015).
In order for this to work, authorities need to ensure important data is exchanged securely, which leads to the three key points of this platform:
• Data needs to be easily accessible by authorities that are authorized to use it;
• The integrity of data needs to remain intact, avoiding any third party to manipulate it while it is in transit;
• Data must remain confidential and protected while being used.
Figure 6 The databases and other components that make up X-Road, the backbone of e-Estonia. (Anthes, 2015)
6.1.2 E-Residency
E-Residency is a program that enables entrepreneurs from all over the world to start and manage an EU-based company online without necessarily moving to Estonia.
This e-Residency is not related to the Estonian citizenship or residency and does not give one the right to live in the country, working just as a financial footprint monitored digitally where an e-resident can register a company, sign documents, exchange encrypted- documents, online banking, tax declaration, and fulfilment of medical prescriptions.
(Anthes, 2015)
6.2 Current E-Government Services available for Businesses
Estonia offers a total of twenty online services, as described in the Estonian digital factsheets published in 2019 by the European Commission. Like Portugal, the categorization made by the Estonia Digital Factsheets in 2019 is the following: intellectual property, start-ups, developing a business, taxation selling in the EU, human resources, product requirements, and finance and funding. (Estonia Digital Factsheets, 2019).
Intellectual Property
• Patents
The Estonian Patent Office is the government agency responsible for providing legal protection to patents, trademarks, utility models, industrial designs, geographical indicators and integrated circuits.
Start-Ups, Developing a Business
• Gateway to Estonia
Gateway to Estonia is a portal that provides all the information and requirements regarding opening up and running a business. By providing this information and transaction services, this portal’s goal is to help businesses in the fulfilment of their obligations and reduce the administrative burden.
• Registration of a new company
In February of 2007, entrepreneurs had the ability to submit data to the Commercial Register through the Company Registration Portal. The identification of the individuals is made through the use of the Estonian eID card and digital signature.
• Company registration panel
Commonly known as e-Residency, the Company Registration Portal allows entrepreneurs to submit electronic applications, documents, and annual reports to the Commercial Register.
These applications can only be signed using the ID-card or Mobile-ID.
• Entrepreneur Account
The Entrepreneur Account is a private account designed for entrepreneurs to operate their business bureaucracy-free and affordably when it comes to financial statements, monthly tax declarations, and payment of taxes.
Taxation
• Eletronic payments
Known as eTaxBoard (Maksuamet), the platform allows corporate taxpayers to view their VAT returns, submit VAT refund applications, and view their tax account balances.
• VAT: declaration, notification Also performed by the eTaxBoard platform.
• Corporate tax: declaration, notification Also performed by the eTaxBoard platform.
Selling In The EU
• Public Procurement, E-Procurement
Publication of all the public procurements provided by the Estonian Government.
• Collection of Estonian law
Portal where the information of Estonian law is provided.
• Customs declaration, E-customs
Under the Estonian Tax and Customs Board’s scope, eToll (name of the eCustoms application) enables online filing of customs declarations, easily accessible from every computer with Internet access.
Human Resources
• Social contributions for employees
The mandatory social tax for employers can be calculated and paid online using the eTaxBoard.
Product Requirements
• Commercial and industrial norms in Estonia
The intent of this website is to enable business validate or acquire standards in accordance to EU harmonized standards.
• Estonian Centre for Standardization
The Estonian Centre for Standardization portal is exactly the same as the one mentioned in the previous point.
• Estonian REACH
Useful information and the text of the national enforcement legislation are available on this portal. The Estonian REACH also provides more information through the Helpdesk Service.
• Environment-related permits Fully transactional service.
• Ministry of Agriculture
Client’s portal of the Estonian ministry of agriculture.
Finance And Funding
• Submission of data for statistical offices
All the information relevant for statistical purposes can now be submitted via eSTAT website.
• Informational website for European Union Structural Assistance
This service’s goal is to gather information about the framework of structural assistance and different funding opportunities in Estonia.
• Grants
Information regarding offering grants and specific loans to young entrepreneurs.
6.3 Maturity and Usage
Estonia E-Government has come a long way since its first draft in 1994. Currently, the online services are used by a great amount of the population. The Internet Voting use has been increasing over the years, and in 2019 it almost reached half of the population (46.7%) for the European Parliament elections. (e-Estonia, 2020)
As mentioned before, 99% of the state services are online 24/7 and amount to a total of 2,773 services that can be used via X-Road. The number of queries done through X-Road keep increasing over the years, and in 2019 reached a total of 180,855,017 queries.
Many have been the accreditations and the distinctive ranking positions for Estonia. The country has ranked number 1 on start-up friendliness ranking (by Index Venture in 2018), entrepreneurial activity (by the World Economy Forum in 2017), and digital health index (by Bertelsmann Foundation in 2019), as well as number 2 for internet freedom (by Freedom House 2019) only overpassed by Iceland. (e-Estonia, 2020)
Figure 7 Estonians using Internet voting (e-Estonia, 2020)
Figure 8 Highest ranking positions for Estonia. (e-Estonia, 2020)
Table 4 Individuals using the Internet for interacting with public authorities in Estonia in percentage. (Eurostat Information Society Indicators, 2020)
2014 marked the start of a new era for Estonia with the start of the e-Residency program. By offering electronic residency to people from outside the country, Estonia became a pioneer in this E-Government feature. Under this program, non-residents are encouraged to access Estonia’s multiple electronic services, reaching to all the different public services a
“physical” resident has.
The numbers reflect the technological improvement. The discrepancy of engagement through the Internet with public authorities between the years of 2014 and 2015 are significant. As is clear in Table 5 (Eurostat), the percentage of users who simply interacted with public authorities over the Internet went from 51% to 81%. When it comes to obtaining information from public authorities’ websites during these years, the percentage of individuals also increased, growing from 48% to 71%. Yet, the biggest difference noticed was users submitting completed forms for these public services, ascending from 32% in 2014 to roughly 71% in 2015.
However, in the year of 2016, the rising tendency from the past didn’t reflect that year. This can be an effect of one of the darkest moments in e-Estonia: Back in 2017, the Estonian government detected a major security flaw that put users’ identities in jeopardy for theft.
Given this, Estonian authorities had no other choice and froze the digital ID cards of the e- Residency program issued between 16 October 2014 and 2017. This decision meant that 760,000 ID cards could not be used to access the e-services, breaking, as reflected in the statistics, the public trust on these.
Ever since this occurrence, the statistics have been, in general, showing improvements in all the metrics. The interaction with public authorities was, in 2016, made by 77% of users and the latest record in 2019 registered a total of 80%. Nearly 69% of users used the Internet to obtain information from public authorities’ websites in 2019, in contrast with 66% in 2016.
The biggest improvement reflected was in the download of official forms, which was done by 41% of users in 2016 and in 2019 reached a total of 48%. Lastly, there was an improvement of 6 percentage points between these years regarding the submission of completed forms, going from 68% to 74%. (Eurostat Information Society Indicators, 2020)
201420152016201720182019
Internet use: interaction with public authorities (last 12 months) 51 81 77 78 79 80 Internet use: obtaining information from public authorities web sites
(last 12 months) 48 71 66 65 69 69
Internet use: downloading official forms (last 12 months) 25 39 41 40 48 48 Internet use: submitting completed forms (last 12 months) 32 71 68 70 71 74
Table 5 Individuals using the Internet for interacting with public authorities in Estonia and EU - 28. (Eurostat Information Society Indicators, 2020)
As expected, table 5 shows that Estonia’s E-Government is used and well accepted by all the population, and this is reflected in the graphic above. It is possible to verify that when it comes to interacting with public authorities using the Internet, the Estonian population is above the EU average for every type of contact.
Currently, when it comes to general interaction of the population with online public entities, the results show that 79% of the Estonian population already engages with the E- Government platforms, outstanding the EU average of 55%.
Nearly 69% of the population obtains information from the public authorities’ websites, in contrast with the 44% European average. As for downloading official forms, the result for Estonia ascends to 48%, as the EU average settles on 33%.
About 74% of people use online public services to send filled forms. This number emphasizes the outstanding work of Estonia in excelling online public services. Given that the sending of filled forms is the highest level of interaction between individuals and their public services, it is remarkable that almost three-quarters of its population does this.
Further on, the Estonian Digital Agenda for 2020 revealed that the general level of satisfaction with the quality of public e-services among entrepreneurs in 2012 was 76% and the value for 2016 rose by 9.3 percentual points, reaching a total of 85.3%. By the end of 2020, Estonia is expecting to reach this level of satisfaction of 90% among employers. (Government of the Republic of Estonia, 2018)
Figure 9 Estonian e-Residents over time. (e-Estonia, 2020)
The amount of individuals on-board with the e-Residency program skyrocketed through the last 6 years, as figure 9 indicates. In the first year of its existence, the program acquired 7.348. This number more than doubled in the next year, as it increased by 7.513. The increasing tendency kept going over the last 4 years, but it is slowly steading. The number of e-residents in Estonia in 2020 reached 65.955 (last updated on the 3rd of February).
Figure 10 Motivation for applying for the Estonian e-Residence program. (e-Estonia, 2020)
The motives for applying for the program are extensive, but the majority of digital residents (33,29%) made their decision based on “location independent international business”.
22,10% of the respondents claimed they applied for e-Residency in Estonia in order to bring their business to the country, while 11,30% state they did it because they are fans of e- Residency. Using the technology of secure authentication was the reason for applying of 5,01% of the e-residents, and almost 1% of this population (0,89%) made this decision for promoting the development of Estonian science, education or culture. 27,40% of the users stated other reasons.
7 Comparison of the E-Government services in Portugal and Estonia
The previous analysis is enough to draw the conclusions that were already expected.
Portugal making Its way into digital government success, with the right mindset and building the steps onto a functional online public administration. The growth seen is significant and the constant desire to improve is revealing beneficial. On the other hand, it is possible to observe that Estonia is one step ahead of the E-Government services, having already an established pole position in this field. The publicity and buzz around Estonia are huge, however, the expectations seem to, to some extent, meet reality.
7.1 History
Curiously enough, the Portuguese public administration started its digital shift before Estonia. The first records of Portugal exploring the E-Government realm go back to 1991 in a light G2C service, with the INFOCID portal providing information for the citizens, while Estonia only drafted the first strategic outline for IT development in 1994, politically turbulent times that impacted the country's social and technological development. Estonia’s E-Government growth was exponential, as by the year 2000 the country had already
established a country-wide IT infrastructure and the first online banking service by 1996, and online tax declaration (2000), reducing government bureaucracy. Modernization in Portugal followed a different path. Bringing the services closer to the population was interpreted as an offline concept. The citizen shop, brought to life in 1999, was a concept inspired by a Brazilian experience: bring the public services to the citizens in a single space.
The Portuguese "online modernization" was only made later in 2006 when the Simplex program was created. By then, Estonia had already created the services mentioned before, plus the integration of X-Road, the digital signature, and online voting. From all of these features, Portugal only has available the digital signature. The Portuguese digital signature was only established in 2017 (Rodrigues, 2017), meaning that by then Estonia was already 15 years ahead.
On the other hand, the Portuguese planning part appears to be more disseminated. Portugal Digital has over 18 programs and national strategies and over 1031 initiatives. Simplex is the main program for the digital shift of the many different public administration fields, with special emphasis on the online business establishment, the main focus of this study.
The variety of services seems to be expanding, and the future is to move towards a platform similar to the Estonian one, in which 99% of the public services are available online. However, the lack of interoperability between the Portuguese public agencies is noticeable. There is no mention of any data exchange between the administrative actors, which would make life easier for the population and, especially, the government. This centralization is one of the main pillars of Estonia: X-Road. This data exchange layer is
one of the key points for the healthy technologic environment in Estonia's public administration.
In addition, Estonia has made its online public services available for foreigners through the e-Residency program, established in 2005. The Portuguese government plans to move forward with the e-residence program for startups in 2020 (similar to the one already existing in Estonia). This measure will make possible for a foreigner to open an enterprise in Portugal without necessarily living in Portugal. This way, the process of starting and managing a business in Portugal for a foreigner will completely shift and be completely covered by the Portuguese E-Government services. The users of this program will also have access to both personal and business banking options and the National Health Service (Parreira, 2020).
7.2 Current E-Government Services Available
The quantity of services available in both Portugal and Estonia is nearly the same. Table 6 is elucidative of that. Marked in orange are the services a country has not available in the online channels or, at least, not mentioned in the digital factsheets, and marked in green, the services available. Portugal offers a total of twenty-two services, while Estonia has twenty- four online public services. The quantity, of course, is not correlated with the E-Government development of the country, as the amount depends on the structure of the public administration of each country. A somewhat more bureaucratic country can have more processes and, potentially, deliver these services online while a hassle-free country can have less bureaucracy with these processes and aggregate most of the services into a simple way, leading to offer less in "amount" but the same in "service".
This line of thought is aligned with what table 6 displays. While the Portuguese Social Security and Health services are divided into multiple sub-services, Estonia shows a more organized and aggregated platform that offers all of these services. However, it is possible to assume that, when it comes to what business-related services an entrepreneur or employee can use online, it is nearly the same in both countries. This leads one to assume the difference for such distance in terms of Digital Government development between Portugal and Estonia may rely on the quality of the actual services. This qualitative research is what will be explored in the next chapters.
