D3.6: Study on ID Documents

Title: COMPLEXITY FACTORING INTO THE ECONOMICS OF EIDS

Complexity Factoring into the Economics of eIDs

Before going into the actual consideration of outlining some of the critical cost-projection factors for eID implementation, an argument has to be made for the complexity that is inherent in such large-scale projects and that argument is simple; there are different degrees of complexity of implementation of eID schemes and the higher the complexity, the more ambiguity is induced into the economic projections and estimations.

The aforementioned statement on the complexity that is influencing the economic projections can be ultimately broken down to systemic and environmental economic complexity and those two can be described as follows:

1. Systemic complexity that generates economic ambiguity concerning the cost-projection of an eID scheme and can be – up to a certain extent – modelled by the government and/or institutions involved in the design and implementation of the scheme.

2. Environmental complexity that generates considerable economic ambiguity concerning the post-implementation cost-projection of an eID scheme and is typically contingent upon a variety of elements that cannot all be a priori accounted for.

The differentiation between system and environment occurs under the theoretical framework of Systems Theory and it is within framework that further elaboration can be attempted (Bertalanffy 1969). The theory has itself been through a series of transformations, each enriching the conceptual subtleties and also its applicability to a variety of different domains for analytical purposes (Luhmann 1995).

There are various issues that should be considered here before we go into describing some of the proxies for considering cost-projection but it is useful to say that the aforementioned classification will be used to categorise the proxies. Furthermore, there also needs to be a clarification on the difference between systemic and environmental complexity. Whereas systemic complexity can be attempted to be modelled more accurately (though never fully) by collaboration between different government departments and/or the industry, environmental complexity resists modelling attempts as it is contingent upon societal, political, and technological aspects that are emergent and create a feedback to the economic system in a multitude of ways, the most prevalent and obvious of which becomes the unpredicted financial costs of the project itself (following the eID implementation). There are other ways however that could potentially affect the economy and these will also be factored into our considerations, for example, the creation of a highly skilled workforce that can potentially enjoy financial gains from transferring skills, processes and a variety of knowledge-driven procedures to other implementation sites and/or integrating the skills and processes into already existing infrastructures.

Finally, before we go into more detail about the elements of the cost projection, we have to clarify that the use of the term cost is hereby used – in several occasions – instead of price. Interchangeable use between the two terms might neglect the fundamental economic difference between them, namely that price reflects and projects a monetary value (say €10billion) whereas an economic interpretation of the cost encompasses price and also includes a variety of other elements that may have an impact on the price itself but do not solely restrict their influences there. Whereas the price of a scheme might appear to be fixed, the costs are observer-relative and accrue from here to eternity whereas they can also involve intangible aspects that harm the societal fabric in a multitude of ways (i.e. loss of privacy).