Latvia is growing rapidly and converging towards a higher standard of living since the beginning of the 2000s. However, considerable challenges await it: the population is declining rapidly due to aging and emigration, productivity growth has declined since the global crisis of 2008, and growth prospects have been put to the test due to the COVID-19 pandemic. A policy to improve digital transformation requires a key role to play in addressing these issues. Going Digital in Latvia examines the opportunities and challenges posed by digitalization in the country, analyses current policies, and makes recommendations to improve them, based on the OECD’s ongoing integrated digital policy framework. Digital transformation is driving rapid changes on an unprecedented global scale while generating opportunity and greater uncertainty. In this context, individuals, organizations, and governments in planning for the coming decades can no longer rely on the assumption that the future will largely look like the present; rather, they need to explore and prepare for a number of alternative scenarios that embody potential changes and the new opportunities and challenges they could bring. This approach can help ensure that the policy strategies and frameworks designed today are resilient and adaptive in the face of digital transformation and the direction, pace, and scope of the changes it could bring.

OECD explores three alternative scenarios for the future of digital transformation, based on wide differences in power structures and relationships between social actors. The first scenario sees a world in which active citizens take digitalization into their hands and form a complete “third pillar” of enhanced online communities as a counterweight to states and markets. The second scenario describes a world in which governments create digital platforms that become the backbone of their economies, promoting exchange between countries that use the same system but creating barriers with those that do not. The third scenario presents a future in which digital multinationals become so efficient and complete in serving their users that many of the roles traditionally held by the state, such as education and well-being, are offered by non-state entities. Individually and as a whole, these scenarios offer an opportunity to rethink hypotheses that have not yet been tested. What roles could peer-to-peer communities and initiatives play in Latvia’s digital future? What kind of digital government does Latvia want to be? In what strategic partnerships and collective initiatives could Latvia participate to secure its place in the world? The scenarios in themselves do not provide answers to these questions, but rather provide a framework within which such questions can be asked.

The analysis ends by identifying some perspectives of action that emerged from the scenario. These fall into four main categories: 1) evaluation and strengthening of Latvia’s strategic partnerships for digital transformation; 2) identify intelligent approaches to education and skills for adaptive and critical Latvians; 3) find pathways to an inclusive digital Latvia, to and from the population; and 4) build capacity to benefit from access to and use of personal data while safeguarding digital security and privacy.

Latvia has made significant economic progress since the turn of the millennium. The economy is growing faster than other EU and OECD countries; productivity, however, remains significantly lower than in other OECD countries, while a declining working-age population limits the prospects for further growth. Digital innovation then becomes crucial to increase productivity and improve living standards. The Latvian Government has taken steps to increase R&D and innovation: a more coordinated approach to the implementation of research and innovation policy, which treats ICT as a cross-cutting technology, could help Latvia improve its modest innovation performance. The main components of this framework are access, use, trust, and innovation: these have been identified as priorities by the Latvian authorities. The review also uses strategic foresight to examine key uncertainties regarding the future of digital transformation and the potential implications for Latvia.

Digital transformation affects different parts of the economy and society in complex and interconnected ways: exploiting the benefits and addressing the challenges of digital transformation requires coordination in all institutional sectors identified within the framework of ongoing integrated digital policies. It also requires the examination of cross-cutting policy issues (e.g. skills, digital governance, and data governance) across different administrative dimensions: coordination involves the involvement of a wide range of economic actors and levels of government, as well as the participation of interested non-governmental stakeholders and international partners. However, it should not be forgotten that there is no universal approach. Different approaches may reflect, for example, changes in state institutions, government organization or culture, and administrative capacity. In addition, governance agreements are likely to evolve over time, for example with changes in government and technological advances. The key is to ensure a coherent and cohesive approach by all institutions to digital transformation policies.