Embed Size (px)
Citation preview
Digital gap – how much does it
cost?
April 8, 2005, Riga
Ģirts BērziņšMember of BoardHead of Product Development and ITAS Hansabanka
Digital gap
EU
• 1 VAT e-declaration = 10 EUR savings for enterprise
• Full scope VAT e-declarations = savings 500 mio EUR annually
• Existing e-government solutions in EU = 7 mio hours savings per year for EU citizens
• Full scope e-government services = 100 mio hours per year savings for EU citizens
• Thus => it is possible to improve 14 times more!!!!
Research sponsored by European Commission
Latvia
How much does it How much does it cost in Latvia?cost in Latvia?
Latvia
• GDP 2003:– 6’322 mio LVL
• Number of employed persons 2003:– 1’007 thousand
• Number of economically active enterprises in private sector:– 44’345
Source Data from Central Statistical Bureau of Latvia
Latvia
• Product created by 1 employee:– 6’322’000/1’007=6280 LVL per year– 6280/12/20/8=3,27 LVL per hour
Calculated data
Latvia
• Proportion of “paper” payments in total payments (by no. of pmts.):– 69% (“paper” in banks + Latvian Post payments)
• For the sake of simplicity let us assume the proportion is the same in private individuals’ payments and enterprises’ payments.
Calculated data (Bank of Latvia statistics, 2004, H1)
39% 15%
16%
0%30%
"Paper" payments PC banking Internet bankingPhone banking Postal payments
Latvia
• Number of payments = 50 per month• Visits to the bank = 2 times per week + 1
time per month for statement• Preparation of 1 paper payment, printing in 2
copies, signed 2 copies, stamped = 6 minutes.– 50*6 = 300 min. or 5 hours
• Way to the bank = 15 minutes.– 15*9(per month)*2(back from the bank)=4,5
hours
• Queue 15 minutes = 3 hours• At teller 10 minutes = 2 hours
Author’s assumptions: average traditional enterprise
Total = 14,5 hours per month
Latvia
• Preparation, acceptance= 3 hours per month
Author’s assumptions: average electronised enterprise
Saved = 11,5 hours per month
Latvia
• 14,5 hours * 3,27 LVL/hour = 47 LVL per month
• 52*12 = 564 LVL/per year/1 enterprise
Author’s calculations: not produced product – traditional enterprise
Latvia
• 3 hours * 3,27 LVL/per hour = 10 LVL per month
• 10*12 = 120 LVL/per year/1 electronised enterprise
Author’s calculations: not produced product – electronised enterprises
Latvia
• If all enterprises electronised:– 44’345*120=5,3 mio LVL
• Current situation:– 44’345*564 LVL*0,69 (proportion of
“traditional”) = 17,3 mio LVL– 44’345*120*0,31=1,7 mio LVL
• Lost to the best scenario:– 13,7 mio LVL or 0,22% of GDP
Author’s calculations: not produced product in country total
Latvia
• Payments per month = 3• Bank visits = 2 times per month• Way to the bank = 15 minutes.
– 15*2(times per month)*2(back from the bank)=1 hour
• Queue + servicing =30 minutes=> 1 hour
Author’s assumptions: average traditional individual
Total = 2 hours
Latvia
• Payments per month = 3• Payments input => 0,25 hours • Visits to the bank = 0,2 times per month• Way to the bank = 15 minutes.
– 15*0,2*2=0,1 hour
Author’s assumptions: average electronised individual
Total = 0,35 hours
Latvia
– 2 hours * 3,27 LVL/per hour = 6,54 LVL per month
– 6,54*12 = 78 LVL /per year/per 1 employee
Author’s calculations: not produced product by traditional individual
Latvia
– 0,35 hours * 3,27 LVL/per hour = 1,15 LVL per month
– 1,15*12 = 14 LVL /per year/per 1 employee
Author’s calculations: not produced product by electronised individual
LatviaAuthor’s calculations: not produced product – individuals/employees• If all electronised:
– 1’007’000*14=14,1 mio LVL
• Current situation:– 1’007’000*78 LVL*0,69 (proportion of
“traditional”) = 54,2 mio LVL– 1’007’000*14*0,31= 4,4 mio LVL
• Lost to the best scenario:– 44,5 mio LVL or 0,7% of GDP
LatviaAdditional comments
• There is a possibility of mistakes – this is not scientific research but rather qualified considerations on subject.
• Enterprises are proportionally more electronised, but this makes a picture even worse.
• Situation is worse as well due to traditions in electronised enterprises due to state requirements – printing out of electronically submitted payments, stamping of them in the bank, etc.
• Calculations of agriculture farms are not made, as well will worsen the picture.
• Inefficiency in the bank – skilled people are employed just to input payments – could be deployed economically wiser.
• Efficiency is raised by usage of direct debit – less time spent.• Effect of electronisation upon unemployment is not calculated.
