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E-mail addresses: falch@cti.dtu.dk (M. Falch), henten@cti.dtu.dk (A. Henten).
See also European Commission (1993, 1996a,b,c, 1997) and High Level Group on the Information Society (1994).
Telecommunications Policy 24 (2000) 377}394
Case study
Digital Denmark: from information society to network society
Morten Falch*, Anders Henten
Center for Tele-Information, Technical University of Denmark, Building 371, 2nd yoor, 2800 Lyngby, Denmark
Abstract
The Danish Government recently issued a new policy report, Digital Denmark, on the `conversion to
a network societya, as a successor to its Information Society 2000 report (1994). This is part of a new round of
information society policy vision statements that are, or will be forthcoming from national governments
everywhere. Denmark provides an interesting case study because it ranks high in the benchmark indicators of
information network society developments. This position has been obtained largely by public sector
initiatives and without erosion of the highly reputed Scandinavian model for a welfare society. However,
globalisation and the spreading use of new information and communication technologies and services
challenge this position. This article examines Denmark's performance in implementing its IS 2000 plans, the
background to the Digital Denmark report, and its implications for the next phase of information society
development. 2000 Elsevier Science Ltd. All rights reserved.
Keywords: Denmark; Digital Denmark;Information Society 2000; Network society; Information policy
1. Introduction
During the mid-1990s, many countries issued information society reports outlining visions/
policies/programmes/plans for the transformation of their national economies and societies. The
US Agenda for Action (National Information Task Force, 1993), the European White Paper Growth,
Competitiveness and Employment and the so-called Bangemann-report (European Commission,
1994)the Japanese Reforms toward the Intellectual Creative Society of the 21st Century (1994), the
Danish Information Society 2000 (Committee on the Information Society, 1994) are only a few
examples. This period constituted an absolute `high seasonafor this type of information society
0308-5961/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved.
PII: S 0 3 0 8 - 5 961(00)00028-8
See Henten, Skouby and Falch (1996) for an analysis of a number of these programmes. The Danish plan is reviewed
in Friis, 1997).
See Henten and Kristensen (2000) for an analysis of the most recent information/network society plans of the Nordic
countries. See also Nordic Council of Ministers (1998).
Discussions related to the report can be found on the web-site http://www.detdigitaledanmark.dk.
Principaftale om sigtelinier for telepolitikken *danskernes adgangsbillet til netvvrkssamfundet (Admission ticket of
the Danes to the network society), September 1999.
pronouncement.The Danish report was distinctive in that it focused primarily on information
services and applications rather than technologies and manufacturing, and in asserting that the
implementation of the programme would be led by the public rather than the private sector.
Recently, the EU and a number of countries have initiated a renewal of the information society
visions and programmes of the mid-1990s.With a new wave of information society reports
beginning to descend upon us, it is timely to examine what has happened with the implementation
of the previous vision statements, why new visions are now necessary, and what the new visions
hope to accomplish. Denmark provides an interesting case study because it ranks high in the
benchmark indicators of information society development. Denmark has even been assessed in
international surveys as the best prepared country to meet the challenges of a new network society
(Ministry of Research and Information Technology, 2000), and Denmark has recently published its
follow-up on its 1994 Info-Society 2000 report (IS 2000).
In 1998 the Minister of Research and Information Technology established a committee to prepare
a new information society programme to replace the IS 2000 programme of 1994. The explicit reason
given by the Danish Minister was that the new programme should take as a point of departure
general societal goals and policy issues *in contrast to the old programme, that was aimed at
constructing an IT-policy. The committee was given the assignment by the Danish Government to
formulate a background report for the future IT-political strategy of the Government. Many persons
and organisations were involved in the work, with the IT section of the Ministry of Research and
Information Technology functioning as secretariat, resulting in a new report in late 1999 with the title
Digital Denmark *Conversion to the Network Society *(Ministry of Research and Information
Technology, 1999a,b) in Danish abbreviated to DDD (Det Digitale Danmark).
In December 1999, the Minister for Research and Information Technology also presented an `IT
and telecom policy reviewato the Danish Parliament (Forskningsministeriet IT, 1999). The latest
telecommunication policy agreement in Parliament from September 1999formed together with
DDD the basis for the review, which included the recommendations from DDD as well as "ve
telecommunication policy initiatives to be implemented in year 2000.
Among other relevant IT-related policy initiatives that deserves mentioning here is the latest
business policy strategy of the government *called, Government's business strategy .dk21 (The
Danish Government 2000). This policy initiative is focused on business and industrial policy but
includes many of the same thoughts and initiatives as DDD and the resulting IT and telecom policy
review of the Minister of Research and Information Technology.
In the following, we will concentrate on the DDD report and only make brief references to the
other policy documents mentioned, as DDD is the latest most important and elaborate policy
document on Danish IT-related policies. It should be noted that the resulting policy review of the
378 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
Table 1
Penetration of phone and Internet services 1998 (per 100 inhabitants)
Fixed lines Mobile phones Internet hosts Internet access
in private homes
Denmark 66.0 36.4 3.63 31
Finland 55.5 57.2 9.99 28
Norway 66.0 47.4 7.16 29
Sweden 67.4 46.4 4.30 42
US 66.1 25.6 28.5 42
High Income Countries 56.1 26.6 3.25
Sources: ITU: World Telecommunication Development Report Geneva 1999, Network Wizards http://www.nw.com
and Ministry of Research and Information Technology: Danish IT Pictures *IT Status report Digital Denmark.
Copenhagen 1999.
Penetration per 100 homes, no year indicated; published in 1999.
OECD countries only.
Forhandling om redeg+relse nr. R 6 (Negotiation on review No. R 6), http://www.folketinget.dk.
Minister received backing from all political parties in Parliament, which illustrates the broad
political consensus that exists in IT-related policies.
The present article examines the content of the DDD report and the intentions behind it. Section
2 describes the Danish point of departure. How far has Denmark gone in the direction of an
information society and what policy actions have been taken so far? Section 3 outlines the policy
recommendations of the report, and Section 4 assesses these recommendations and the context in
which they must be seen.
2. What is the point of departure?
Before discussing the recommendations of the DDD report, we "rst consider at the development
of the Danish information society since the IS 2000 report was published in 1994. What was the
potential, which policy actions have been taken and what has been achieved?
2.1. The basic telecommunication infrastructure
Denmark, as well as the other Scandinavian countries, is indeed in the forefront in terms of
penetration of ICT services. Most international comparisons of penetration of ICT services are
topped by the United States and the Scandinavian countries. Denmark is however usually placed
after Sweden and Finland (Table 1).
The IS 2000 report was not very speci"c regarding the development of the telecommunications
infrastructure, as the liberalisation of the telecommunications sector still was under negotiation.
But a wide penetration of telecommunication services "ts well with the objective that the informa-
tion society should be for all, and a division between an A-tier of computer literates and a B-tier
without access to the bene"ts of the information society should be avoided.
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 379
As with most other EU countries, a major reorganisation of the tele-sector has taken place. In
1995 it was decided to complete the liberalisation of the Danish telecommunications market 18
month ahead the 1998 target set by the European Commission, and it was announced that Danish
telecommunications should be `best and cheapest by way of real competitiona(Ministry of
Research and Information Technology, 1995). The liberalisation of the tele-market and the
subsequent privatisation of Tele Danmark are considered a success with a positive impact on the
penetration of communication services. The lead in penetration cannot, however, be attributed to
this alone. The Scandinavian countries have always by international comparison had high
penetrations of phone lines *a fact that may be explained by the egalitarian social structure
related to the Scandinavian welfare society model.
The liberalisation and privatisation of the telecommunication market has attracted new actors
to the Danish market. At present there are six major players o!ering telecommunication services in
Denmark. However, Tele Danmark still dominates with an overall market share of 85%. As in
other countries, it has been di$cult to promote local loop competition. In 1999, it became possible
for other operators to o!er subscription to private customers using the lines of Tele Danmark
(unbundling). This is expected to reduce the market share of Tele Danmark further and to increase
competition in local telephony.
The IT and telecom policy review presented by the Minister of Research and Information
Technology include a number of initiatives for implementation in year 2000. These include:
(1) allocation of frequencies for wireless access (FWA);
(2) mobile access to the Internet by use of UMTS;
(3) more frequencies and licenses for mobile telephony;
(4) more competition in wired services obtained among others through a revision of the terms for
interconnection;
(5) establishment of a TETRA network for emergency services.
The intent of these initiatives is to strengthen competition for all types of network services.
Wireless technologies are used to introduce competition in local access *an area where Tele
Danmark in practise has a monopoly. Furthermore, competition in mobile is increased by issuing
more licenses for these services.
With the privatisation of Tele Danmark, foreign players with an international orientation
dominate the Danish market. This may imply that new services developed elsewhere will be
implemented more rapidly on the Danish market. On the other hand, less e!ort may be required to
develop new services in Denmark. Tele Danmark has recently closed down its research and
development department and has located development activities close to marketing activities.
SBC/Ameritech, which controls the company, does not give priority to more basic research
activities. In the long run this may reduce the expertise locally available as well as the number of
jobs in the telecommunications sector. Perhaps even more important, it may also delay the
introduction of new services in areas where the Danish market is ahead of the American market.
Tele Danmark was the "rst to introduce the `Duet servicea*a system integrating cellular and
wired phone services into one common service concept. This service was developed by Tele
Danmark in order to create an advantage over its rivals at the highly competitive Danish market
for GSM services. Introduction of such a vanguard service designed to address speci"c needs of the
Danish market may become less likely in the future. Only if the Danish market, which is small
380 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
Table 2
Electronic Commerce in Scandinavian Countries and Western Europe (1998)
Internet trading
in % of population
Business -to-Consumers
turnover per capita ($)
Business -to-Business
turnover per capita ($)
Total turnover
per capita ($)
Denmark 1.6 317 864 1181
Finland 2.9 489 778 1267
Sweden 2.9 525 835 1360
Western Europe 1.2 223 454 677
Source: Adapted from Ministry of Research and Information Technology: Danish IT Pictures *IT Status report
Digital Denmark. Copenhagen 1999 various tables.
compared, e.g., to the American market, proves to have obvious advantages, will Denmark be
chosen as the "rst place to introduce a new service.
2.2. Electronic commerce
DDD puts much emphasis on electronic commerce and recommends that Denmark should be
among the top "ve countries in this area. So far Denmark is doing quite well particularly in
business-to-business applications. In the business-to-consumers market, the success is less pro-
nounced. Only 1.6% of the population has ever tried to trade on the Internet. This places Denmark
as number seven among the Western European countries and far behind United States, Sweden
and Finland.
The intensive use of electronic commerce between businesses is due to a wide penetration
of EDI. Denmark has been quite successful in agreeing on common industry standards. This
has resulted also in a wide penetration of EDI for smaller companies. Standardisation
has been achieved by various business organisations, facilitated by the Danish EDI council,
which is a private organisation receiving funds both from the public and from the private sector
(Table 2).
The Government has also contributed to the use of EDI through the preparation of Electronic
Commerce in Denmark *a national EDI action plan (Ministry of Research and Information
Technology, 1996). This plan was set up in order to promote standardisation and public use of
EDI. The strength of this plan was that major public and private players were active in the
formulation of the various initiatives. This has ensured that most of the recommendations were
translated into action.
Parts of the public sector have been early adopters of EDI. Hospitals have participated in
standards setting for EDI messages for various types of health-speci"c information, and this has led
to an extensive use of EDI in all parts of the health sector including hospitals, practitioners,
pharmacies and even health visitors.
In spite of the high penetration of computers and Internet access in private homes, electronic
commerce involving private citizens has been far less successful. One reason often cited for this is
the short distances within the country and, as a consequence, very little tradition of mail ordering.
Another reason is that many shops have been waiting for a proper solution for payments via the
Internet, and to a certain extent for the development of a digital signature.
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 381
2.3. Electronic payments
Denmark used to be in the forefront of electronic payments, owing to the Dancard *a univer-
sally accepted debit card used by the vast majority services of the adult population. Denmark was
also one of the "rst countries to introduce a smart card-based electronic purse for payment of small
amounts in phone booths, parking lots, coin laundrages, etc. (Dancoin). These cards were intro-
duced as part of a common payment infrastructure available to all banks operating on the Danish
market. It seems, however, that Denmark is missing out on the opportunity of maintaining its lead
in new forms of electronic payments. After a series of mergers, three major banks dominate the
"nancial market. These banks prefer promoting their own corporate payment solutions, at the
expense of a common payment infrastructure.
This has prevented further development of the Dancard concept (e.g., by combining Dancard
and Dancoin into one common smart card) and has delayed the introduction of a Dancard for
Internet payments. Internet payments have also been delayed by a dispute over the "nancing of the
investments demanded in system developments *investments that the banks would "nance only if
they were allowed to impose a fee on each payment made over the Internet, to be paid either by the
shops or customers. The proposed fee was not in accordance with legislation, which had to be
changed before the banks were willing to introduce payments over the Internet using the Dancard.
Retailers strongly opposed a solution where they were charged for each transaction. After a long
dispute, Dancard payments on the Internet were introduced in April 1999. It was accepted that
a fee of 1.95 DKK (app. 0.25 US$) was charged for each payment. This fee can only be charged on
Internet payments and not on any other types of payments made using the Dancard. A key factor
in the wide penetration of the Dancard is that it can be used for payments without any costs for
either the consumer or the shop, and the new fee has been a limiting factor in the development of
Internet payments.
A further complication has been that the banks have tried to promote the secure electronic
transaction (SET) standard for payment transactions, as it is safer than secure socket layer (SSL).
Payments with SET demand that users "rst register in the Danish Clearinghouse PBS and install
a dedicated software packet on their computer. This procedure has turned out to be too compli-
cated to attract more than just a few users, and fewer than 10 shops in Denmark o!er payments by
use of SET.
The so-called network money such as eCash or CyberCoin is not used in Denmark. Tele
Danmark tried in 1998 to introduce a system called Net-Coin for micro-payments based on IBM's
micro-payment system Minipay, but the system was closed down after a trial period.
The Government has been very reluctant to intervene in the creation of a payment infrastructure
for the Internet. One of the reasons why the dispute on the "nancing of a system for payments with
the Dancard on the Internet has taken so long is that the Governments'hesitation to intervene with
new legislation before a full agreement was obtained among all parties concerned.
2.4. Electronic signatures
The legal validity of electronic documents and signatures is still uncertain. Some years ago,
a Danish chemical company reported falsi"ed data on their discharge of wastewater to the
authorities. The company was accused of forgery, but the court found the company not guilty as
382 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
the information was delivered on a #oppy disk rather than on paper. This case clearly illustrated
the necessity of a revised legislation on the validity of electronic information. `Electronic Com-
merce in Denmarka(Ministry of Research and Information Technology, 1996) saw electronic
signatures as important for the development of electronic commerce, and the plan announced that
the Ministry of Research and Information Technology would present a bill on electronic signatures
and the legal status of electronic documents during the Parliamentary session 1996/1997. The idea
was that Denmark being one of the "rst countries to adopt such legislation would enjoy "rst mover
advantages and in#uence international regulation.
The Ministry of Research and Information Technology drafted a proposal on electronic
signatures, which would imply full legal recognition of electronic signatures. An electronic signa-
ture should be based on an asymmetric key encryption, administered by a number of private but
publicly certi"ed key centres. However, the Ministry of Justice *a more powerful Ministry *was
reluctant to move toward recognising electronic signatures as having the same legal value as
signatures on paper. The traditional signature is an integral part of all contractual legislation and
full recognition of electronic signatures will have an impact on about 10,000 legally covered
contexts.
This debate delayed the whole process for more than two years. In the meantime, the EU had
begun to prepare a directive on electronic signatures and it was decided not to pass the bill before
this directive was adopted in December 1999. The Danish law was presented to the Parliament
immediately after. The delay of a legal framework for electronic signatures has delayed a number of
projects and initiatives related to electronic commerce both in the private and public sector. Many
applications require a secure identi"cation of the user and only few have been willing to invest in
alternative identi"cation systems prior to the legislation and general infrastructure for electronic
signatures were being in place.
2.5. A digital citizen's card
The electronic signature was in a sense already addressed in the IS 2000 report. The most
debated suggestion from the report was the introduction of a digital citizen's card. (The card was
depicted on the front page of the report.) The idea was to o!er a smart card with a picture and
a PIN code to all citizens. This would be used for identi"cation with public authorities and would
replace the health insurance card as well as other public cards and certi"cates. Technically, the
implementation of this proposal would be quite simple as a national population register, where
each person is identi"ed with a 10 digit code, has been in operation since the 1970s, and most
registries *public as well as private *use this code as a reference.
The card however, was never realised due to concerns regarding data protection. In particular,
the possibility of authorities being able to combine data from di!erent sources was a subject of
concern.
2.6. Digital administration
Following the IS 2000 report, public authorities were urged to promote the initiating of new
projects using IT to both reduce costs and improve services. Although the authorities have had to
fund such activities out of their own budget, a number of projects have been initiated *the
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 383
motivation for this being the expectation of future cost savings. Most successful has been the use of
EDI for the exchange of health data, as noted above.
Several authorities have made plans to enable electronic reporting by citizens and private
companies. This will both enable substantial cost savings and make it possible to opening up the
public sector information to citizens. The idea is that private citizens should be able to follow how,
e.g., applications are processed. The Ministry of Industry has also taken an initiative to co-ordinate
mandatory reporting from companies to all public authorities, so that the same information only
has to be delivered once. This will be an important advantage for the companies as they, at present,
spend substantial resources on the preparation of reports to the public.
Many of these initiatives have been waiting for the implementation of a safe electronic identi"ca-
tion of citizens. The rejection of the citizen's card and the delay of an electronic signature have thus
slowed down the introduction of public sector IT applications involving external communication.
The tax authority is one of the few that have implemented electronic reporting by private citizens.
Income statement forms are sent to every taxpayer by post. For the majority of the taxpayers, the
tax authority has collected all relevant information from employers, etc., beforehand. Any correc-
tions can be delivered by the taxpayer via the Internet or by phone guided by a voice response
system and using the push buttons enter in the correct information. This system works primarily
because the information delivered is very simple and because a personal identi"cation number is
attached to the written income statement sent by post.
2.7. It in education
According to a survey by the OECD, Danish students in secondary schools use computers more
frequently than in any other country. In line with the philosophy of IT being a technology for all,
much e!ort has been devoted to ensuring access to computers not only for higher education, but
also in public primary schools (children aged 7}16). There is, however, a long way to go before
computers are fully integrated in the teaching process. Although intensive supplementary training
has taken place, not all schoolteachers have su$cient knowledge of computers. Investments in IT
have not been followed by more resources to public schools in general, and the focus on IT
equipment has put heavy "nancial pressure on budgets for other teaching materials, extra lessons,
etc. Nevertheless, both computers and the Internet are becoming an everyday tool for the vast
majority of schoolchildren, who will be well prepared to use the Internet for connecting to public
and private services.
2.8. Promotion of the it sector
The IS 2000 report focuses on applications of IT rather than production, and among all
the numerous tables, presented by the Ministry of Research and Information Technology, presen-
ting Denmark as an IT-front-runner, there are no tables on employment or production of
IT equipment or services. This re#ects a very liberal approach, where direct support to industry,
as a rule, is to be avoided. This is not to say that industrial policy directed towards the IT sector
is completely absent in Denmark, but such initiatives are not seen as a part of the IT activities
related to the IS 2000 or DDD.
384 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
Another reason for the focus on applications is the fact that the Danish IT manufacturing
industry is comparatively weak. Denmark has a telecommunications industry of some signi"cance,
in particular in radio communications (although it is much smaller than in Finland and Sweden),
however production of computer hardware is very limited. IT goods as a percentage of manufactur-
ing value added for Denmark in 1993 was only 3.4% compared with the OECD average of 7.2%
(OECD, 1997). More recent "gures on the Scandinavian market indicate that this is still the
situation (Table 3). With regard to production of IT services, Table 3 indicates that production is in
line with that of Sweden and Finland.
3. The report
Condensed from the DDD-report, the strengths and weaknesses of the Danish society with
respect to preparedness for the network society are summed up by the Minster of Research and
Information Technology in her review to Parliament in the following manner:
Strengths:
Ein a number of surveys, Denmark is assessed as the country in the world that is the best prepared
to meet the challenges of the future;
Ewe have a well-developed telecommunication infrastructure and a widespread use of the
Internet;
EDanes have a high level of training and education and we have a #exible educational system;
Ewe have an industrial structure with relatively small businesses with a great conversion potential;
Ewe have a well functioning public sector.
Weaknesses:
EDenmark has a poor high-tech entrepreneurial culture, and we do not yet fully utilise the
potentials, which our high level of training and education suggests that we have;
Ewe are lacking large enterprises that can push digital market forward, including the many
relatively small enterprises, which are ready for realignment,
Ea sector-divided public sector that makes it di$cult to co-ordinate the process of conversion
(Ministry of Research and Information Technology, 2000, p. 6).
In spite of the self-complacency often met in such characterisations of strengths in national
IT-plans (especially the "rst point) and in spite of the somewhat contradictory message in that it is
both a strength and a weakness that the industrial structure in Denmark mainly consists of
relatively small "rms; and that the public sector is both well-functioning and di$cult to co-ordinate
*the points mentioned do describe important aspects of Denmark's position in relation to the
realisation of the potentials in the development towards a network society.
With the challenges described, encompassing both the potentials and the Danish position, the
DDD-report turns to a listing and description of 40 initiatives proposed under six headings:
Elife-long learning;
EDenmark as an e-commerce nation;
Edigital administration;
EDanish Internet initiatives;
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 385
`Digital Denmarka, p. 10. All initiatives in this section are quoted from `Digital Denmarka, pp. 10}17.
EIT lighthouses;
Edecision-making on IT-policy.
3.1. Life-long learning
The overall objective here is that `Denmark be the "rst country in the world, to ensure its
citizens access to life-long learning via the network society.aTen initiatives are listed:
1. an overall strategy should be drawn up for how all Danish citizens can be ensured access to
life-long learning;
2. increased IT support for teachers at primary and lower secondary schools;
3. all publicly employed teachers and instructors should be o!ered a home PC with access to the
Internet, "nanced by a combination of user payment and contributions from the employer;
4. requirements for use of IT in classes and for exams in all education;
5. one high-speed link-up to the Internet for every 10th pupil before 2003 in all primary and lower
secondary schools;
6. english classes should commence in second grade and material in English should be included in
teaching from nursery school on up;
7. a virtual university should be established o!ering remote teaching to students in Denmark and
abroad via the Internet;
8. the number of IT postgraduate students should be increased;
9. the number of students admitted to computer science degree courses should be doubled over
three years;
10. a training project should be implemented under which 10,000 unemployed persons or persons
threatened with unemployment will be o!ered participation in a course leading to IT quali"cations.
Learning initiatives thus focus on learning, at an early (school) stage, how to use IT; on
re-education of the unemployed situation; on using IT as a tool for education; and on increasing
the number of speci"cally IT-educated persons. The fact that learning is taken up as the "rst
initiative area indicates the importance attached to learning and competence development. It is not
su$cient that the penetration of computers and Internet access is high and increasing. It is also
necessary that these tools be used in ways that exploit their potentials in terms of economic and
other social developments.
In the parliamentary debate on the Government's review and proposals, it was criticised that the
goal for 2003 in terms of high-speed Internet links in schools is only one link per 10 pupils. More
substantially, it could also be criticised that the initiatives seem to concentrate on education of school
children and students although the learning process is supposed to be life-long. But such initiatives
may be included via the development of the overall strategy proposed in the "rst initiative point.
3.2. Denmark as an e-commerce nation
The next line of proposed initiatives says that `Denmark is to be one of the "ve countries in the
world, which have the largest e-commerce turnover per inhabitant in 2003a. Again, 10 initiatives
386 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
are listed:
11. an e-commerce House should be established in "restaden (close to Copenhagen);
12. prizes for those who have made particularly noteworthy e!orts to convert their enterprise to
the digital economy;
13. an overall plan should be drawn up for how public procurement is to be made digital;
14. one or more public Internet auction halls should be established for supplies of goods and
services to the public sector;
15. an IT and telecommunications research consortium should be established;
16. up to "ve IT `incubatorsashould be established;
17. the regulation for the taxation of share options should be changed to aid recruitment and
holding on to employees;
18. changes to depreciation regulations in order to write o!IT investments in a way that re#ects
the actual useful life of the IT investments;
19. adoption of labour-market rules to the conditions of the network society;
20. promotion of Internet services and broadband connections as a means of increasing public
demand.
The priority given to e-commerce illustrates that it is seen as the clearest expression of new
production, distribution and consumption relations in society. This is probably also why initiatives
both for the labour market and for taxation are listed under the e-commerce heading. A politically
debated point concerns the taxation of share options. Share options are seen as one of the more
important drivers of the IT-business in the US. Business representatives and the liberals (right
wing) in Parliament have for some time been advocating more advantageous rules regarding
taxation of share options in order to make it easier for businesses to attract highly quali"ed
personnel and to increase the enthusiasm of employees and co-owners. In principle, the Social
Democratic and Radical Party Government does disagree *even the Socialist Peoples Party
believes that initiatives must be taken in this area. But there is still some disagreement as to how the
new rules more speci"cally should be phrased.
The main trend for the e-commerce initiatives concern, however, (1) support for a `digitalisa-
tionaof the economy (e-commerce house, prizes and `incubatorsa) and (2) the demand for
e-commerce-related services by the state as a driver for the development of e-commerce in society
(e.g., digital procurement, Internet auction halls, increased public demand). This last group of
initiatives is especially important as it points to the kind of intervention in industrial develop-
ment in society that is given priority today. Direct intervention is not considered as impor-
tant as before, while di!erent kinds of indirect and framework-creating initiatives are taken to
the fore.
3.3. Digital administration
For `digital administrationa, the stated goal is: `at the latest by 2003, Danish public administra-
tion is to provide the best and most e$cient public service in the Nordic countries with the help of
digital administrationa. The initiatives proposed to achieve this are:
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 387
21. citizens should be given access to all publicly registered information about themselves, to
a customised information system, and to easy, rapid and safe self-service;
22. citizens should be given a statutory title to their own data;
23. before the end of 2000, the most common of the forms used by citizens should be able to be
retrieved and submitted via the Internet.
24. a public information server should be established to give citizens and enterprises easy access to
public information services;
25. all young people between 18 and 21 yr of age should be o!ered a free digital signature in the
period 2000}2003;
26. all public institutions should have an e-mail address by the end of 2001 and all central
municipal, county and state administrations should have a homepage;
27. a telephone call centre should be established, using three-digit numbers to provide information
about all public authorities and institutions;
28. all public home pages should be assessed for quality on a continuous basis;
29. the state sector's internal administrative routines should be digitised;
30. a loan scheme should be established whereby public authorities could borrow money to
introduce IT.
Initiatives in this area focus on public institutions'communications with citizens and enterprises.
Only one initiative deals with the internal administrative procedures of the state, however,
electronic forms of contact between institutions and citizens will also necessitate other types of
contact and internal routines between the institutions themselves. One of the major weaknesses
(listed by the Minister of Research) in the Danish position towards the development of a network
society, is the decentralised and sector-split public sector. This is not directly addressed here. But
this problem is devoted a speci"c initiative regarding decision-making on IT-policy (see "nal
heading for policy initiatives).
Another line of initiatives in this area deals with the rights of citizens in relation to information
registered about them. This has for a number of years been a major concern in public debates.
Following the IS 2000 report from 1994, a `citizen's cardawas proposed by Government, which
would allow easier access to public information for citizens but also could be used for easier access
for public authorities to combined information about citizens. The card was, therefore, rejected but
is now surfacing in a new form, emphasising the rights of citizens to know what is registered about
them and providing them a statutory title to their own data.
The immediate emphasis on improving electronic communications between public institutions
and citizens/enterprises relates to e$ciency and e!ectiveness. However, both improved commun-
ications and greater transparency in public administration also clearly have democratic implica-
tions. Knowledge about public a!airs and what is going on in public administrations has, of course,
always been central to democracy. Such knowledge is, however, increasingly important with the
growing speed of changes in society and with the extension of the spaces of action of citizens,
companies and public institutions.
Access to information was also given a central place in the IS 2000 report of 1994. Quite
a number of things have actually happened with respect to electronic communications between
public institutions and citizens/enterprises. But not enough *so this is once again an area given
much emphasis.
388 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
3.4. Danish internet initiatives
Another line of initiatives, which touches more directly on building democratic procedures, is the
one entitled &Danish Internet initiatives'. The aim here is for `participation in democracy, open
decision-making processes and Danish cultural activities to be supported by new and interactive
Internet services for all citizens by 2003 at the latesta.
Six initiatives are proposed:
31. a main portal should be established as the common entry point for Danish citizens into
political debate and information on the Internet;
32. a main portal should be established to provide information about associations and to support
the interactive communication of associations with their members, public authorities and other
interested parties;
33. research initiatives should be implemented to increase knowledge of the social perspectives of
the network society;
34. a plan of action on Danish language technology should focus on accessibility, with a view to
ensuring that all groups have access to new technology;
35. a report should be prepared on the consequences of convergence in the network society;
36. formulation of the IT rights of citizens should specify the rules of play in the network society
an, among other things, ensure free encryption without the possibility of illegal interception.
While &digital administration'focuses on access to public information, 'Danish Internet initiat-
ives'takes up another aspect of the development of democracy. Citizens should not only have
access to information; they should also have the possibility to voice their own opinions. Further-
more, the importance of the development of civil society is emphasised, both in terms of getting in
contact with associations and in terms of public debates between civil society organisations.
A third point, besides access to information and the possibility for expressing one's own opinion,
that is often addresses in relation to questions of IT and democracy, is electronic voting. In the
DDD report there is no action line on electronic voting as this procedure is rejected by the report.
Electronic voting is considered to produce shallow decisions and the known forms of representa-
tive democracy are preferred.
One of the main features of IS 2000 from 1994 was the debate on the dangers of new divisions in
society *of A- and B-tiers. This debate is not explicit and is not given the same emphasis by DDD.
However, it is implicitly addressed by the access discussion and is explicitly stated in the point
regarding Danish language technology, which will make it easier for Danes who are not pro"cient
in English to use the Internet.
The last point in this line of action concerns the IT rights of citizens, among them free encryption.
Together with a statutory title to one's own data and the right to know what is registered by public
authorities, this forms part of a basic framework for a &bill of rights'for electronic communications.
3.5. IT lighthouses
Under the heading `IT lighthousesa, it is intended that `two IT lighthouses are to be established
in Denmark, one in Northern Jutland and one in "restaden, to promote, from di!erent perspect-
ives, IT development and IT use in the network societya. The idea is that in these two locations,
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 389
experiences with large scale `trialsawith network society developments should be acquired. In both
locations, public institutions and private companies have already taken many initiatives and the
aim is to build on these to gain further experience.
This initiative is inspired by similar developments in other countries where high-tech industries
tend to locate in geographic clusters. In the parliamentary debates, this point was discussed as it
was considered to be a `picking the winnersainitiative. The argument was that market forces
should pick the preferred locations for IT clusters *an argument that is much in line with
concentrating public initiatives on shaping the framework for business developments and not
engaging in direct interventions. However, here the Government aims toward a more direct
support for business development. There is some hypocrisy in the discussion on direct and indirect
support. Although indirect framework establishment is the preferred model, there is still much
direct economic support of di!erent kinds. It is, for instance, explained in DDD that the develop-
ment of a high-tech IT industry in Northern Jutland is partly the result of EU-support for an area
that, at a point of time, went through an economic crisis because of the downfall of some of the
traditional industries in the area.
3.6. Decision-making on it- policy
Last but not least, two initiatives are listed to ensure co-ordination of IT policy:
Ean annual review of IT policy initiatives should be presented to the Parliament;
Eco-ordination of IT initiatives should be strengthened at political, administrative and technical
levels.
The concern here is that IT policies and initiatives have hitherto not been su$ciently co-
ordinated. This partly re#ects the decentralised public decision-making structure and the self-
regulatory character of the Danish labour market. Therefore, `rapid conversion of Denmark to the
network society requires signi"cant political focus and targeted action. IT policy organisation and
decision-making power are important instruments for ensuring thisa, it is stated in DDD (p. 106).
4. Analysis and assessment
In the DDD-report it is suggested several times that Denmark should be `the "rstaor `among
the "ve bestawithin in certain time horizon. This Guinness Book of Records type of competition, at
"rst, seems somewhat ridiculous but fundamentally re#ects an awareness of the increased interna-
tional competition among countries. In many other areas, the Danish Government also seeks to be
among `the besta, epitomised in the Danish word `foregangslanda, where `landameans country
and `foregangaliterally means to be at the front but also has the connotation of giving a good
example. The word, thus, re#ects both the competitive spirit and the above-mentioned self-
complacency of the Government's attitude.
However, more importantly it is a result of a type of international competition where countries
strive to be the preferred sites for production in an increasingly internationalised environment.
Competition among countries is, indeed, not a new thing. But the kind of competition where
countries seek to retain and attract investors and entrepreneurs in an international competition is
390 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
something that has only become more and more important during the past 20}30 years and slowly
but decisively has come to the awareness of political decision-makers.
The areas that the DDD-report then gives prominence in order to put Denmark in an
advantageous position for international competition are learning, e-commerce, access to public
information, means of social communications, and IT-lighthouses. What is striking is the `softa
character of these areas. All of them, of course, have implications for business developments in
society *as practically all matters have. But business development is far from the only area given
priority. E-commerce and IT-lighthouses are the two initiative areas that focus speci"cally on
business development. Learning is also important for business development, but has broader
perspectives. The two other initiative areas mainly focus on aspects of democratic procedures.
Business and democracy developments are the focus areas of the report.
From this point of view, the DDD-report is very similar to the IS 2000 report from 1994. The
main thoughts and trends in the initiatives are the same. Some of the initiatives are even the same,
which does not necessarily indicate that nothing has happened but that, in some areas, it has been
more di$cult to make progress than anticipated *which is acknowledged in the DDD-report.
However, more importantly it also shows that things take time and that they have to be pushed
continuously to move. In the preface to the DDD-report, the authors discuss whether it is not an
excessively long time to use one whole year for writing a report on IT-initiatives in a time when
things `move fastaand an `IT-yearabecomes still shorter. However, quite correctly, the authors, in
contrast, state that one year is `a very short time, considering that every day brings news about
developments in ITa(DDD, p. 6).
In the IT-industry there is often a feeling, or anyhow rhetoric, that everything moves so fast that
political initiatives are obsolete even before they are taken. In reality, however, many things move
very slowly *on the more fundamental side. The deeper social changes encompassed in expres-
sions like `the global short-circuit and the explosion of informationa(IS 2000) or `the new
economya(DDD) are long-winded processes. Change and continuity is the development pattern in
the IT-area as in so many other areas.
The explicit reasons for commissioning a new report were, in reality, quite vague. The most
clearly pronounced reason was that there was nothing about the Internet in IS 2000. Furthermore,
it was stated that it would be important to have a report that re#ected the, apparently, new
sentiment that the aim is not to establish a speci"c IT-policy but to look at the many social
implications of the implementation and usage of IT. As stated in DDD: `It is not as if there is
a natural limit for where IT policy begins and where it ends. IT developments and IT policy make
themselves felt everywherea(DDD, P. 6). However, where the "rst reason is correct, the second is
not. It may be that the understanding that the aim is not to construct a separate IT-policy has been
broadened out during the past years, but the IS 2000 report was as clearly based on the
understanding that IT a!ects all aspects of social life as the DDD-report.
There are, however, some di!erences between the two reports. One is that there is not the same
concern for possible cleavages between an information A-tier and a B-tier in society as a conse-
quence of IT developments. An adaptation to the importance of IT in society has taken place and
there is less fear of new social divisions. Another di!erence is that e-commerce, in a broader sense,
has come to the fore where only (business-to-business) EDI was a priority in IS 2000. Further, the
new catchword is now `network societyainstead of `information societya*adi!erence which is
never explained but perhaps re#ects a vague analogy to the transition from stand-alone computers
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 391
(information) to networked computers. However, the most important di!erence between the two
reports is, probably, that DDD is more focused than IS 2000. While IS 2000 took up almost any
aspect of the society where an impact of ICT could be expected, DDD focuses on four to "ve
speci"c areas.
It may very well be that where IS 2000 attracted a great deal of public attention but did not
achieve as many results as anticipated, the contrary will be case with DDD. Although there was an
intention that there should be a lively public debate surrounding the work with DDD, this never
really happened. And DDD has received very little public attention. But because of greater
experience in the "eld, a sharper focus, and a procedure that allocates money for initiatives in
advance, the results of DDD will probably be felt more strongly than those of IS 2000. One billion
DDK have been allocated for the initiatives put forward by the Minister of Research in her review
to the Parliament. This may not seem as a great deal of money, but compared to the "nancial
means allocated for IS 2000, there is a greater extent of "nancial dedication.
Although, DDD does not de"ne IT policy just as a technology policy does not de"ne industrial
or economic policy, the most important goal seems to be that ICT shall be used to ensure economic
growth. However, the plan does not de"ne a clear industrial strategy to ful"l this goal. The report is
clearly fascinated by the enormous fortunes earned by the owners of Yahoo and Excite, and it is
stressed that Denmark must be in the forefront to obtain "rst mover advantages. But, the
recommendations in DDD focus rather on how ICT can be used to improve productivity and the
business environment in general, than on how a strong ICT sector can be developed.
The kinds of initiatives proposed in the DDD-report are mostly directed at public institutions
themselves *improving organisation and administration relating to the functioning of municipal,
county and state institutions. They are not directed at the conduct of businesses. This does not
mean that they will not, and are not intended, to a!ect business conditions. They surely will and
are, however, only indirectly. For example, state procurement and demand is used to advance
certain solutions, or for getting production started in areas where the level of production is at
a rudimentary level. The focus of initiatives is, thus, on improving the environmental conditions, for
example, by enhancing learning in society, by using state demand as an initiator, or by establishing
easier communications between public authorities and citizens and enterprises. The mode of
intervention is preferably indirect.
This re#ects a traditionally very liberal Danish approach to industrial policy, where support to
speci"c industries is to be avoided, and is in line with the overall trend in business policies in most
countries. Business policy initiatives are primarily directed at improving conditions for service
production. It is tempting to state that there is focus on the usage side of IT, rather than on the
production side. But this is only half-true. There is also an interest in improving conditions for
IT-production. The major e!ort is here directed towards IT-service production, which re#ects the
weight of IT-service production in Denmark as compared to IT-equipment (see Table 3).
The priority given to service production is also an important element in discussions
concerning the `Government's business strategy .dk21a, mentioned above. The Trade and Service
Association and the IT-Industry organisation both see the Government's business strategy as an
expression of a greater emphasis on service development as compared to manufacturing. These two
(employer) organisations support the business strategy of the Government while the major
(employer) representative of the manufacturing industries (Danish Industry) has been rather
critical.
392 M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394
Table 3
Turnover in IT-manufacturing and services as % of total manufacturing and service turnover, 1996
IT-manufacturing as % of total
manufacturing
IT-services as % of total services
Iceland 4.2 7.7
Norway 3.8 10.0
Sweden 11.1 15.0
Finland 10.1 13.1
Denmark 4.0 14.0
Source:`The Information and Communication Technology Sector in the Nordic Countriesa, TemaNord 1998:587,
Nordic Council of Ministers, Copenhagen, 1998, Table 2.3.
The primary source of contention is taxation where Danish Industry has been campaigning for
reduced taxes *business taxes as well as income taxes. The Government, on the other hand, in
.dk21 (p. 4) clearly states that:
The Government is convinced that it is a wrong track for a dynamic business sector to compete
on low taxes, low salaries and, consequently, on a weaker society. It is not more market and less
society that is needed. It is, on the contrary, our experiences with the welfare society that gives us
a good point of departure for creating a future where we combine competitive strength with
coherence. A strong business sector with a sustainable society, that is the direction in which the
Government wants to go.
Similar statements are made several times in the same document and has gained support from
parts of the business sector that feels that this expresses a new understanding of business
developments in society, an understanding that includes giving priority to service developments
and not to more traditional manufacturing industries.
To what extent the two questions, taxation and service vs. manufacturing, are overlapping may
be discussed. However, they converge in the sense that the type of service developments advocated
by the Government presupposes a high educational level and continuous learning, which requires
a high level of taxation. In a catch phrase of the Government: `The answer of the Government to
the new challenges presupposes that a sustainable welfare society and a strong business sector are
mutually dependant.a(.dk 21, p. 3)
An important trend in the industrial policy of the Government can thus be concentrated in three
headings:
Eservice developments;
Ewelfare politics;
Eregulation of business environment.
This line of thinking is clearly also the basis for the DDD-report although it is not as sharply
formulated as in the .dk21 document. This may also be why the DDD-report has received broad
political backing while there is greater controversy around the .dk21 strategy. IT-policies still seem
somewhat immune to political di!erences *except for minor quarrels concerning speci"c aspects.
However, when IT-policies are raised to the level of `realapolitics implying allocation of substantial
M. Falch, A. Henten /Telecommunications Policy 24 (2000) 377 }394 393
economic resources in society, di!erences arise. Learning and education are good examples of this.
Everybody will agree that education and learning are important for the development of a network
society. But when it comes to allocating extra funds and imposing taxes, the question looks quite
di!erent.
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