IN
DEGREE PROJECT INDUSTRIAL MANAGEMENT,
SECOND CYCLE, 15 CREDITS STOCKHOLM SWEDEN 2019,
Digital Inclusion on the Agenda
An analysis of the final stage of diffusion of electronic identification in Sweden
EVELINA HÅDÉN JESSICA ENGLUND
KTH ROYAL INSTITUTE OF TECHNOLOGY
Digital Inclusion on the Agenda
An analysis of the final stage of diffusion of electronic identification in Sweden
by
Evelina Hådén Jessica Englund
Master of Science Thesis INDEK 2019:555 KTH Industrial Engineering and Management
Industrial Management SE-100 44 STOCKHOLM
Digital inkluering på agendan
En analys av användandet och spridningen av elektroniska identitetshandlingar i Sverige
av
Evelina Hådén Jessica Englund
Examensarbete INDEK 2019:555 KTH Industriell teknik och management
Industriell ekonomi och organisation SE-100 44 STOCKHOLM
Master of Science Thesis INDEK 2019:555
Digital inclusion on the agenda
An analysis of the final stage of diffusion of
electronic identification in Sweden
Evelina Hådén & Jessica Englund
Approved
2019-08-20
Examiner
Kristina Nyström Supervisor
Kent Thorén
Abstract
As digitalisation continues to spread, the impact technology has on society is evident. In Sweden, digitalisation has led to the end of analog options forcing individuals to rapidly adapt to new technologies. For this reason, the diffusion of electronic identification (eID) as a critical technology occurred at an accelerated rate. However, a segment of society remains without access to this innovation. In this study, qualitative semi-structured interviews were conducted with influential eID actors in Sweden to identify factors that impact the diffusion process, with a focus on late adoption. The result of this study shows that collaborations, accountability, biases, compatible technologies, and infrastructure technologies influence the spread of eID. These factors are overarching in the system infrastructure and are hence specified as system level factors. These findings have implications for innovation diffusion and digital divide theories as well as policy decisions regarding infrastructure technology and the practical requirements for adopting to eID.
Key words: Digital Divide, Diffusion of Innovation, Electronic Identification, Information and Communication Technology, Late Adoption, Laggards
Examensarbete INDEK 2019:555
Digital inkludering på agendan
En analys av användandet och spridningen av
elektroniska identitetshandlingar i Sverige
Evelina Hådén & Jessica Englund
Godkänd
2019-08-20
Examinator
Kristina Nyström Handledare
Kent Thorén
Sammanfattning
I takt med att digitaliseringen breder ut sig blir teknologins påverkan och inflytande över samhället mer tydlig. I Sverige har digitaliseringen lett till att analoga tjänster upphör, därmed tvingas individer att snabbt anpassa sig till ny teknik. Av denna anledning har spridningen av elektroniska identitetshandlingar (e-leg) accelererats. Denna teknologi kan klassas som samhällskritisk och har därmed en särställning. Dock finns det icke-användare som ännu inte tagit del av denna innovation och därmed saknar tillgång till viktiga tjänster. I denna studie har kvalitativa semistrukturerade intervjuer genomförts med inflytelserika e-leg aktörer i syfte att identifiera faktorer som påverkar den sista fasen av innovationsspridning. Resultatet av denna studie visar på att samarbete, ansvar, fördomar, kompatibla tekniker och aspekter av infrastruktur samverkar och potentiellt begränsar användandet av e-leg. Detta utmanar teorier kring innovationsspridning och den digitala klyftan.
Dessutom får dessa insikter betydelse för politiska beslut angående samhällskritisk teknik, samt för det framtida användandet av elektroniska identitetshandlingar i Sverige.
Nyckelord: Digitala Klyftan, Innovationsspridning, Elektronisk Identitetshandling, Informations och Kommunikationsteknik, Eftersläntrare
Table of contents
List of figures i
Definitions and abbreviations ii
Preface iii
1. Introduction 1
1.1. Background 1
1.2. Research aim and contribution 2
1.2.1. Research question 2
1.2.2. Delimitations 2
1.3. Sustainability aspects 3
2. Literature review 4
2.1. Diffusion of Innovation 4
2.2. The Digital Divide 8
2.3. Theoretical framework 10
3. Methodology 12
3.1. Research paradigm and design 12
3.2. Data collection 14
3.3. Data analysis framework 17
3.4. Trustworthiness and authenticity 20
3.5. Ethical considerations 22
4. Empirical analysis 24
4.1. Barriers for usage 24
4.1.1. Non-bank users 24
4.1.2. Non-citizens of Sweden 24
4.1.3. Age 25
4.1.4. Disabilities 27
4.1.5. Opt-outs 27
4.1.6. Knowledge 28
4.1.7. Hardware 29
4.2. The context of eID 29
4.2.1. The importance of eID 30
4.2.2. Surrounding Interfaces 30
4.2.3. Forced adoption 31
4.2.4. Security for industry 31
4.2.5. Collaborations 31
5. Discussion 33
5.1. Complexity of Diffusion 33
5.2. Identifying the Divide 35
6. Conclusion 38
6.1. Summary 38
6.2. Implications 39
6.3. Limitations 39
6.4. Further research 40
7. References 41
Appendix
Informed Consent Form I
Interview Guide II
List of figures
Figure 1.
Adopter Categorization on the Basis of Innovativeness (Rogers, 2003, p. 522)...4 Figure 2.
A cumulative and recursive model of successive kinds of access to digital technologies (Van Dijk, 2005, p. 22) ... 9 Figure 3.
Division of laggard theories and digital divide levels (own illustration) ... 11 Figure 4.
Populations and samples (Graziano & Raulin, 2013, p. 246) ……….……… 14 Figure 5.
Swedish electronic identification actors network (own illustration) ……….………. 15 Figure 6.
Working with qualitative data; drilling in and abstracting out (O’Leary 2017, p. 331) ………...……….. 18
Definitions
Innovation - an idea, practice, or object that is perceived as new by an individual or other unit of adoption (Rogers, 2002)
Diffusion - a special type of communication concerned with the spread of messages that are perceived as dealing with new ideas, and necessarily represent a certain degree of uncertainty to an individual or organization (Rogers, 2002)
Laggards - the last 16% of the individuals in a system to adopt an innovation (Rogers, 2002)
Digital Divide - the separation between those who have access to digital information and communications technology (ICT) and those who do not (Dewan & Riggins, 2005)
Information Society - the usage of new information technology both to the individual and organizational level with high ease, in all spheres of activities with a significant economic and social impact, making changes in social, cultural, educational, economic, environmental, political, administrative and judicial dimensions, changes that influence the work, study and life conditions of all citizens (Adrian, 2012).
Abbreviations
eID - Electronic identification
ICT - Information and communication technology SDG - Sustainable Development Goals
Preface
Throughout the process of this thesis we have received invaluable insight and support from those around us. Those who have advised and directed us the most deserve special recognition. Firstly, we would not have achieved the level of academic excellence without the teachings and supportive resources provided by the Royal Institute of Technology. The courses provided by the institute of Industrial Management and Engineering guided the course of this research and challenged us to seek answers to difficult questions. We would like to thank our supervisor, Kent Thorén, for providing guidance throughout the ups and downs of this project. Mana Farshid, program director, who ensured we received the knowledge required for a foundation of understanding.
Examiner, Kristina Nyström, for her constructive feedback and helping us better our research.
Additionally, Cali Nuur, who inspired us to pursue our research on digital inclusion and provided teachings on the theories included in this paper. Furthermore, we would like to thank Rich Nadworny, for providing practical insights into the industry and the participants of our interviews who took the time to contribute to our findings. Additionally, we recognize the contribution our peers have had on this paper and are grateful for their advice and input. Lastly, there is a special thank you to the men who have supported us and loved us despite the difficulties of this research and writing. We are grateful for their encouragement and our accomplishments are sweeter for having them beside us.
Thank you,
Jessica Englund & Evelina Hådén
2019-08-20, Stockholm
1. Introduction
In this chapter, digitalisation as an innovation and the implications it has had through the rapid change of the societal infrastructure is discussed. Additionally, the problem of excluded users of eID in Sweden is identified as contributing to the digital divide in society. The aim of the study is related to social sustainability and described as analysing the ICT diffusion and preconditions of adopting to eID from a multi-actor perspective.
1.1. Background
Information and communication technology (ICT) has enabled a fusion between digital and analog worlds contributing to the vast implementation of digitalisation (Kagermann, 2015). In Sweden, digitalisation has progressed at an accelerated rate. The country is the EU innovation leader (European Commission, 2019) and displays uniform strength across the digital evolution index (Chakravorti & Chaturvedi, 2017). As new technologies emerge at a rapid rate, the impact of digitalisation on society is substantial, altering how citizens interact with public institutions, private companies and each other. When looking at digital services provided by the government and industries in Sweden, electronic identification (eID) is one of the innovations that has had a wide spread as a result of the digital transformation making it an interesting case for studying the diffusion of ICT.
In Sweden, eID grants users access to private and public services including online banking, tax-services and digital purchases. Furthermore, the services are used to access government platforms, verify identity and sign legal contracts (Agency for Digital Government, 2019).
Sweden’s eID services are privately owned compared to, for example, Denmark where the government controls the infrastructure for eID (Hansteen, Ølnes & Alvik, 2016). The market leader serves more than 90% of the eID customers (Oucherlony, 2019) and is owned by a consortium of the largest financial institutes in Sweden. Though other private eID solutions exist on the market, their service offer is not as widespread, thus making Swedes highly dependent on a single eID solution (Statens Offentliga Utredningar, 2019).
As digitalisation progresses and analog services are being removed eID becomes a necessity for citizens managing their everyday transactions. The last three years big banks in Sweden have closed a quarter of their offices (Rex, 2018) which forces society into an accelerated adoption rate for online banking and thereby the use of eID. The emergence of an information society stresses the importance of digital skills (Van Deursen & Van Dijk, 2014). Those who are unable to adapt to the skills required for interacting with this new technology are left behind resulting in digital exclusion that affects multiple layers of the society. Its reported that approximately 81% of adult Swedes use an eID (IIS, 2019). The remaining percentage of the population who has not yet adopted to eID are defined by the diffusion of innovation theory as laggards (Rogers, 2003). The gap between those who utilize eID and the laggards who have not adapted is known by the industry and academia as the digital divide (Rice & Pearce, 2015). With the widespread diffusion of ICT in Sweden the digital divide is small compared to other European countries (OECD 2018), yet an estimated 1,5 million Swedish residents seldom or never connect to the internet (IIS, 2019).
Individuals face a broad range of practical issues when being disconnected from crucial ICT, for example difficulties in transferring money as bank branches close down. In addition, digital
exclusion has negative consequences for companies and government (Dewan & Riggins, 2005).
For private actors, digital exclusion can result in excessive costs due to the need of keeping analog methods available. Looking at the society as a whole, the digital divide causes social inequalities based on citizens lack of access to crucial services. This motivates the need for further studies into the field of eID in a highly advanced technological society such as Sweden.
1.2. Research aim and contribution
The aim of this paper is to analyze how the final stages of diffusion of information and communication technology occurs, particularly the diffusion of electronic identification. Sweden’s high penetration of ICT and eID services renders it an optimal case for analysing the last stage of technology adoption. Through this research, the authors hope to provide insight on how the digital divide is dealt with from a multi-actor network perspective and how actors providing digital services that are critical to society address digital inequality. Additionally, the research aims at contributing to an industry perspective of the ICT diffusion by analysing the preconditions for adopting to eID and potential stereotypes of laggards.
The contribution to the body of knowledge is related to the theory of diffusion of innovation and the digital divide. Previous research of innovation diffusion mainly consists of large quantitative studies (Meyer, 2004) aimed at understanding the demographics of non-users of ICT, creating a foundation for an individual blame bias (Rogers, 2003). This is also evident in the research regarding the digital divide which focus on individual characteristics as reasons for lagging behind in technology adoption (Van Dijk & Hacker, 2003).
In order to address the societal challenge of the digital divide and create a deeper understanding of how technology diffuses in society, the role of actors who provide and disperse eID services is important to evaluate. Hence, this study takes an industry perspective to address the individual-blame bias with the unit of response being influential actors of service providers as well as governmental organisations. The analysis is conducted at a system level and thereby includes a holistic approach of the actors, policies and users who impact the overarching system of innovation diffusion. Through identifying organisational challenges connected to assimilation of laggards into eID services, this research suggests improvements to frameworks that assist structural change at system and actor levels.
1.2.1. Research question
In order to achieve the aforementioned research aims and contribution to the body of knowledge, the following research question is posed;
● What system level factors influence the late adoption of electronic identification?
1.2.2. Delimitations
The framework of innovation diffusion (Rogers, 2003) describes how technologies spread in society, and combined with theories on the digital divide (Hoffman, Novak & Schlosser, 2000), a holistic understanding of the last stage of ICT diffusion is created. For this reason, other theories that build on the diffusion theory, like the technology acceptance model (Davis, 1989), are not used. Neither are the characteristics of the innovations or technical aspects explicitly addressed as reasons for late adoption. The diffusion concept is limited to the adoption of technological
innovations like eID. Additionally, innovation is defined as an idea, practice, or object that is perceived as new by an individual or other unit of adoption (Rogers, 2002).
Though there have been several studies on digital inclusion from the perspective of society (Prensky, 2001; Keller, 1995; Van Dijk, 2006), this study focuses on the innovations and stakeholders who are essential in order to address the digital divide. Accessibility and financial barriers are not as prevalent in a case study of Sweden due to the saturation rate of access.
Therefore, this research focuses on knowledge and usage based constraints. Additionally, the access to internet or financial restraints, as mentioned in the Bottom of the Pyramid theory (Prahalad, 2009), are not discussed.
This research paper focuses on the Swedish banking and e-government network due to its rapid progression within digitalisation and highly technologically developed services in the area of digital identification. However, the technical aspect of ICT creation and development will not be discussed. The methodological choices of this study are designed to give a versatile image of the barriers to eID adoption in Sweden. Nonetheless, all aspects that influence the diffusion of eID and excludes members of society through technological advancements will not be covered.
1.3. Sustainability aspects
Social sustainability and equality in society are correlated to the digital divide and equal access to vital technology. This research addresses digital inequalities as defined by the Sustainable Development Goals (SDGS) (United Nations, 2019). In accordance with these goals, this study aids the spread of innovative technology amongst individuals who are outside of the information society. The findings in this research corresponds with SDGS 1.4 which states;
By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance.
Electronic identification is more important than ever for accessing basic services. Therefore, the eID is considered an appropriate new technology which provides entry to the majority of financial services. The digital divide is a concern for social sustainability. This research is further connected to the ICT skills described in goal 4.4.1, the development of infrastructure in goal 9.C and multi-stakeholder engagement and partnerships described in goal 17.8 (United Nations, 2019).
Through this research, the authors hope to raise awareness of this divide in society and advice actors within the network in ways to provide more inclusive solutions.
Furthermore, the economic sustainability of companies, government and individuals is bettered through a deeper understanding of the effects of the digital divide. Through this research more efficient methods of innovation diffusion are possible which prevents the waste of environmental resources and contribute to a more sustainable future.
2. Literature review
In the present chapter, the basics for two theoretical frameworks are presented. The first framework of innovation diffusion describes how an innovation spreads and adopts by society.
The group of laggards that make up the final stage of diffusion are of specific importance for this study and elaborated on further in section 2.1. In the literature on the digital divide three main themes are identified, the first, second and third level of the digital divide. Each of these levels have their own impact on digital inclusion. For this study the second level that relates to digital competence have specific importance and is described further in section 2.2. Within each of these fields previous studies including seminal and state of the art pieces are presented before summarising the perspective in a joint theoretical framework in section 2.3.
2.1. Diffusion of Innovation
Rogers (2003) states that “diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.” (Rogers 2003, p.100).
Diffusion theory has a strong historical connection to sociology studies (Ryan & Gross, 1943) where spread of both ideas, practices and diseases in complex social systems are examined and interpreted (Strang & Soule, 1998). The dynamics of diffusion are tangible. In the information society individuals constantly adapt to changes that affect the foundation of the societal infrastructure, like digitalisation of public services.
Studies of diffusion of new products in business markets discuss similar aspects as those targeting consumer markets. Both research fields can prove valuable for this kind of topic, however due to differences in the communication process and the type of product marketed, studies of individual adopters are primarily referred to in this literature review. To understand the final stage of innovation diffusion one can look at the technology life cycle in figure 1 that is an illustrative and widely used model that has sustained over the years.
Figure 1. Adopter Categorization on the Basis of Innovativeness (Rogers, 2003, p. 522)
The majority of studies published on adopter groups focus on early majority and innovators, often with the ambition to explain how products reach a critical mass and thereby sustain itself. Fewer researchers take interest in what happens after the peak of the curve. As the market share reaches
