Digital Austria – overview of domestic digitalisation efforts

"Digitalisation" means the "identification and consistent exploitation of potential arising from digital technology".¹ Nowadays, nearly every sector of life is concerned with meeting people's or entities' demands by means of digital technology. These demands include:

• the manufacturing of goods;
• facilitating logistics; and
• offering services or access to e-government sector services.

Further, various areas largely depend on and profit from digital innovation, including:

• education;
• research and innovation;
• health; and
• the economy.²

All kinds of businesses can offer products or services online, thus streamlining their processes and, by doing so, saving time and money.

The need for large-scale digital change became evident at the beginning of the covid-19 pandemic. Companies that had fully functional home offices before their competitors were able to conduct their sales activities via an online platform. Such companies not only were more successful during the pandemic, but may achieve sales growth of up to twice that of the technology latecomers in just a few years, according to recent studies.³ However, digitalisation is more than e-commerce, which is why it is necessary for authorities and politics to provide a good framework.

General overview and history

One of the government's earliest and most important digitalisation projects was the E-Government Act (E-GovG), which entered into force on 1 March 2004.⁴ "E-Government" is the "simplification of administration through the use of information and communication technologies".⁵ The use of new media enables authorities to make services accessible to a broad public and facilitate communication between public entities, citizens and entrepreneurs. As a result:

• official communications can be shortened (eg, forms can be filled in and filed online, printed out and sent electronically);
• processes can be accelerated; and
• costs can be saved both on the company side and on the administration side.

The main elements of the E-GovG were:

• the setup of a one-stop-shop point for citizens through which to communicate with the (federal) authorities;
• a digital citizens' card or mobile phone signature acting as a digital ID for identification and authentication;
• the electronic delivery of (official) documents and letters; and
• the standard document register, containing the data of important citizen documents (eg, birth certificates, wedding certificates and notifications of residence).

Further, the Unternehmensserviceportal (USP) platform enabled companies to take care of their administrative needs online (eg, using the e-founding-service, carrying out e-procurement, filing financial reports and sending notifications to health and social insurance).⁶ The E-GovG has been regularly amended – most recently in 2020 – to meet the requirements of a modern administration, but also to reflect the necessary changes resulting from European regulations, such as the EU Regulation on electronic identification and trust services for electronic transactions in the internal market.⁷

Because of these early efforts in the e-government and digitalisation fields, and the constant improvement of these measures, Austria has for many years ranked among the most successful countries in Europe in terms of digitalisation. Since 2001 the European Commission has been examining digital administrative services in EU member states (and Iceland, Montenegro, Norway, Serbia, Switzerland, Turkey, the United Kingdom, Albania and Northern Macedonia) annually and regularly publish their findings in the eGovernment Benchmark report. In 2019 and 2020, Austria ranked third out of 36 countries surveyed.⁸ The eGovernment Benchmark 2020 also identified and presented several of Austria's services as "internationally significant good practices". These include:

• the e-government platform "oesterreich.gv.at" and its mobile app;
• the right to electronic communications enshrined in section 1a of the E-GovG as an active implementation of the "digital by default" principle; and
• electronic delivery via the electronic mailbox on the USP platform and other platforms.⁹

Current situation

Nevertheless, when covid-19 hit Austria in 2020, it became obvious that many domestic businesses did not have enough digital know-how to offer their goods and services online or digitalise their processes. Despite using the provided e-government tools (partly because they are obliged to), many Austrian businesses were poorly prepared for the digitalisation needs that resulted from the covid-19 pandemic. Presently, only 25% of Austrian companies also sell their products and services online.¹⁰ Many small and medium-sized enterprises (SMEs) lack expertise in online sales, especially in online marketing and cybersecurity. The companies that do not yet use an online sales channel either consider their offering as unsuitable for online sales or have not yet addressed the issue.

According to the Digital Economy and Society Index issued by the European Commission, Austria is only just above the EU average in terms of providing digital public services for businesses, ranking 13th overall, and well behind innovative countries such as Luxembourg and Denmark.¹¹ A survey conducted by the Austrian Institute of Economic Research in May 2021 found that Austria's strength lies in providing digital public services to citizens, but that there is still a need to catch up regarding offering such services for businesses.¹² On the other hand, studies show that more than 90% of Austrian distance-selling expenditure is already made online (€8,7 billion, which is an increase of 7% compared with 2020). Even though 54% of distance retail spending still goes to foreign businesses, loyalty to Austrian stores is increasing (by 3% compared with 2020).¹³ This also means that Austrian business owners are expanding their online offers and investing in their digital expertise to be more competitive. One of the reasons that domestic businesses are improving their competitiveness in the online market is public sector funding.

Digitised Austria – future plans

In June 2020 the minister for digital and economic affairs, Margarete Schramböck, presented the digital action plan Digitised Austria.¹⁴ This paper provides a strategic framework for all digitalisation topics relating to the federal government and stakeholder initiatives. Digitised Austria focuses on the following relevant areas of digitalisation but is vague in formulating its goals:

• economy – more growth and work through better use of data;
• government – more digital services and fewer costs for enterprises and citizens;
• education, science and innovation – better future through digital innovation for all;
• health and foster care – better health and quality of life for all generations; and
• security and infrastructure – more (data) security and resilience for Austria.

However, despite the strategic goals being very general, there are many state and state-related players offering individual measures and funding to support businesses on their way to digitised processes. The Federal Economic Chamber, for example, provides considerable funding for many relevant digitalisation projects (eg, consulting, product development, e-commerce activities, cybersecurity and digital marketing).¹⁵ The Klein- und Mittelbetriebe (KMU) Digital platform is a joint venture between the Ministry for Digital and Economic Affairs and the Austrian Economic Chambers. It provides information on:

• digitalisation;
• funding;
• contacting experts; and
• other important information with a focus on SMEs.¹⁶

Further, the Digital Competence Pact project involves businesses, educational institutions and public administrations and aims to equip citizens with digital and technical skills to enable them to use "digital media in a competent and reflective manner" and qualify them for participation in modern society.¹⁷

To reach the goals of Digitised Austria (and other digitalisation milestones), it is of vital importance to link and use existing data from various sectors. High-quality data from citizens and businesses must be collected, processed and made available by a governmental agency in order to be used adequately. This is particularly important for health, research and science, but also for education and security. The government agency that makes the data available must ensure full data protection compliance; its actions must have a legal basis and it must pursue a transparent purpose. The rights of the data subjects must be protected and (if possible) the data subjects must be involved in decisions concerning them.

Criticism

Critics note that the government bodies entrusted with the implementation of digitalisation are not suited to this task. On the one hand, digital competency does not seem to enjoy a high priority within these bodies themselves. On the other hand, the responsible persons for the digitalisation projects do not tend to seek advice from or hire data protection activists or other non-governmental experts.

At the end of 2020, for example, the Ministry for Digital and Economic Affairs launched a website that aimed to provide an online platform for Austrian SMEs. This digital Austrian shopping mall, Kaufhaus Österreich, was supposed to draw online customers away from big foreign competitors. However, it was not possible to buy products through it. Kaufhaus Österreich was just a collection of poorly functioning links that referred to the respective online shop. The search function did not work properly, and users could search only for dealers and not find products. Conducting a search for "shoes" led to hits on a mountain farmer's site, a table tennis store and a children's clothing store. Anyone searching for "bicycles" in the vicinity of Vienna found offers from Vorarlberg, 600 kilometres away.¹⁸ Moreover, website costs amounted to an astonishing €1.3 million and, due to legal problems (the ministry found out that it was not allowed to run a commercial website), it had to be taken offline after only three months.¹⁹

A recent government project has drawn similar criticism from data protection activists. With Chancenreich Österreich (which literally translates as "rich in opportunities Austria"), a plan that was presented by the chancellor and vice-chancellor, as well as the minister of digital and economic affairs, Austria plans to enforce a digital and sustainable economy. According to this plan, Austria is to make extensive use of health data, arising mainly from citizens' electronic health records, for academic research, to optimise the foster situation and enable an efficient and accessible healthcare system. Austria is to become "Europe's hub for pharmaceutical and medical technology research and commercialisation".²⁰ International partners are to collaborate by making specialised health datasets available to each other. The plan also contains the intention to expand existing regulatory and legal frameworks and adapt them to enable extensive use of health data. Data protectionists criticise that the data involved is sensitive and that there was a clear commitment from politicians to keep it safe and not hand it over to third parties.²¹

Another project presented by the Austrian government aims to create a new extensive database by amending the Federal Statistics Law and the Research Organisations Act.²² All data already available at Statistics Austria would thereby be merged into a new "super database" with data from other government registers, to achieve advantages for Austria's science hub. Research institutions would get access to the (pseudonymised) data, but so would business players. The Austrian Data Protection Authority and the Austrian Bar Organisation criticised the draft and called for further legal guarantees for the protection of personal data, mandatory monitoring and effective penalties in case of an infringement.²³

Comment

Digitalisation can be a useful tool to reduce costs and streamline processes, but it also requires distinct political goals and legal and technological frameworks. These frameworks must take care of and enshrine the rights of people and data subjects. In Austria, it is to be welcomed that money and time can be saved and communication with authorities, enterprises and citizens can be accelerated and simplified through more interconnectivity and digitalisation of processes. However, care must be taken to ensure that the rights of the people affected by digitalisation are not curtailed. Decision-makers (in Austria) should be careful to address all concerns when implementing new technologies and possibilities and not make decisions solely based on political or economic interests. After all, the protection of people's rights must be paramount because digitalisation affects us all – sooner or later.

Endnotes

¹ First report on digital transformation of the Federal Ministry of Defence, October 2019. To access the report, click here.
² See OECD, Science, Technology and Innovation Outlook 2016 – Megatrends affecting science, technology and innovation.
³ Accenture Studie, June 2020, Digitalisierung – Konjunkturmotor in der Krise, p 8 et seq.
⁴ Bundesgesetz über Regelungen zur Erleichterung des elektronischen Verkehrs mit öffentlichen Stellen (E-Government-Gesetz – E-GovG), BGBl. I Nr 10/2004.
⁵ For further information click here.
⁶ For further information click here.
⁷ Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC.
⁸ For further information click here.
⁹ For further information click here.
¹⁰ For further information click here.
¹¹ For further information click here.
¹² Bock-Schappelwein, Firgo et al 2021, Digitalisierung in Österreich: Fortschritt, digitale Skills und Infrastrukturausstattung in Zeiten von COVID-19.
¹³ KMU Forschung Austria, e-Commerce Studie Österreich – Konsumverhalten im Distanzhandel.
¹⁴ For further information click here.
¹⁵ For further information click here.
¹⁶ For further information click here.
¹⁷ For further information click here.
¹⁸ For further information click here.
¹⁹ For further information click here.
²⁰ For further information click here.
²¹ For further information click here.
²² Bundesstatistikgesetz 2000, Forschungsorganisationsgesetz.
²³ DSB 03.08.2021, 38/SN-135/ME XXVII. GP - Stellungnahme zu Entwurf; Österreichischer Rechtsanwaltskammertag 9 August 2021, 64/SN-135/ME XXVII. GP - Stellungnahme zu Entwurf.

This article was first published on Internatioanl Law Office, 03.09.2021.  
author: Florian Terharen