How Nations Gain From Digital IDs
Last updated
Last updated
Under the status quo, every individual has to repeatedly send their documents to multiple institutions who all perform verifications of the same information independently. With SSI, much of this labour can be automated: leading to reduced costs and more efficient citizen data stewardship.
With digital identity, different nations will receive different benefits depending on the state of their economy:
Developing countries: The inclusion of previously excluded demographics in all service sectors across the economy.
Developed countries: Streamlined applications and the freedom to shift resources away from compliance-related processes.
🤲 Inclusion of Underserved Populations
A digital ID allows mass outreach to these excluded individuals, driving inclusivity and encouraging economic growth by introducing them to both the domestic and the global economy. Direct access to a harmonised identity hub for citizens could also allow independent departments to efficiently contact and invite citizens to upcoming government initiatives or services, as all qualification criteria and contact information will be stored in a single source of truth. It will no longer be necessary for large-scale government operations to be launched to inform the public about these programs, nor will it be necessary to deploy manpower to individually invite and vet applicants.
Meanwhile, a 2019 McKinsey report estimates that there are 3.4 billion individuals worldwide who actually possess identification but have limited access to the digital system. This means that just half of the world's population is unable to experience the value gained from integration of digital identity at even the most basic level. Access to e-services or infrastructure without the need for Independent Identity Providers (IDPs) removes barriers to entry and boosts accessibility while being more secure to boot.
Despite all the upside, there is still a question as to how exactly digital identity can increase the number of legally recognised citizens in a country. The reason digital identity can boost adoption is straightforward - unlike physical documents, digital IDs can be granted based on self-submitted proofs without traveling to far away government offices, the latter being extremely difficult for those living on the outskirts of undeveloped countries with lacking infrastructure. The need to constantly renew each individual piece of documentation in person every few years is also an extremely costly inconvenience, and as such, many citizens choose to either let the credential expire, or not to apply for it at all. The ability to go through all these processes digitally greatly mitigates the barrier to reapply, thus ensuring that individuals are not excluded from the economy due to systemic issues.
🕒 Save Nearly 110 Billion Hours of Labour
The McKinsey report also found that governments themselves could save nearly 110 billion hours from streamlined e-government services (as opposed to the traditional manual processes commonly used today). These services can range from social benefit programs to a pension-related offering. In essence, the many independent branches of government will be able to instantly qualify their target demographic for each service before reaching out to them. At the same time, citizens need not undergo lengthy applications since the relevant departments already have their credentials and merely need their consent, which in and of itself can come in a host of secure forms enabled by a digital identity.
To quantify exactly how much value the development of this industry brings, the same McKinsey report reveals that digital ID development could lead to significant economic gains: mature economies could see up to 3% GDP growth, while emerging economies might achieve as much as 6%. In some scenarios, the potential impact could reach up to 13% of GDP by 2030, emphasizing the transformative power of digital IDs in enhancing economic efficiency and growth.
