It is the administrative burden, stupid.

Many of us know that SMEs and also employees in larger enterprises and the public sector complain about an ever-growing administrative burden. Much caused by nitty-gritty difficult-to-decipher regulation. This is also coming from the work to make the Single EU market real.  There politicians can always blame Brussels. 

One way of counteracting it has been one-in-two-out simplification programs. Impressive results have to my knowledge been achieved in Germany and in Finland. More can – and should – be done to relieve stress and cut costs further.

But the lion’s share of administrative burdens is in internal processes.  This work is not always visible as the work has been outsourced to accounting firms and other suppliers. But it costs money. 

I became impressed a good number of years ago when the public sector in Finland estimated that the annual cost saving for incoming invoices could rise to 0,3 bn€ and the Federation of Industry arrived at 2,8 bn€. This would mean 220 bn€ on a European level. And then the impact from moving staff from costly routine tasks to income generating work was not included. Or a shrinking of the grey economy.

Still the enthusiasm was not overwhelming – even if the banks offered very simple low-cost e-banking-integrated service for both sending and receiving invoices. Accounting firms – complaining about staff shortages – could also have done much more. Eventually – with the help of transparent pricing for manual work and invoice receiver’s deadlines for paper and PDFs – the migration took place.

The same was experienced when the Real Time Economy Program received estimates showing that e-receipts could achieve annual savings of 0,8 bn€ (Europe 70 bn).  But then the general-purpose wallets for exchanging the "Proof of Purchase" documents were not yet around.

Now we are entering an entirely new phase when enterprises and the public sectors will be able to exchange verifiable data with soon EUDI-interoperable wallet applications. The productivity impact was estimated by McKinsey to a 3-6% GDP-growth by 2030.

As enterprises on their own cannot achieve this we need strong political leadership in EU (achieved with the call for business wallets) and member states. The study in Germany – arriving at an annual cost saving of 84,7 bn€ in larger enterprises’ administrative procurement and customer processes has been a wake-up call there. Now it is very high on the Mertz-government’s priority list. Could this be raising the interest to the concrete level (deploy organisation wallets from the markets) for all member states, UK, Norway and Ukraine? 

I believe that we will soon we see both bold political leadership and enthusiasm in enterprises – once we have served up as enough concrete examples of data exchange cases with general purpose solutions – also as preconditions for employing and empowering AI-agents.