Feature Story

The digitization of Iceland

by Melissa Jun Rowley

“The cloud is everything here.”

Iceland is giving new meaning to the phrase “lucky number seven.” A mere seven years ago, the nation was flooded by a crashed stock market and a slew of bankruptcies. However on September 11, Statistics Iceland reported that Iceland’s GDP increased by 5.2% in the first two quarters of the year, compared with the same time frame last year.

Suffice to say, Iceland is in recovery mode. This is largely due to its adoption of Information & Communications Technology (ICT). According to the 2015 edition of the State of Broadband report from the UN Broadband Commission,

Iceland has the highest number of people using the internet—98.2 percent.


There are 11 mobile subscriptions for every 10 households, and seven out of 10 Icelanders use mobile broadband. The country’s public sector is also increasingly digital in its use of government services.

See also: Transforming the global landscape through the new digital age

Ari Kristinn Jónsson, President of the University of Reykjavik, actively researches technology development in Iceland and beyond. He says Iceland makes for an ideal testing bed for digitization.

Iceland is a small country with only about 330.000 inhabitants and yet has very good infrastructure in terms of energy and communications  

says Jónsson

“That means it is indeed possible to digitize whole sectors fairly quickly, as there are not too many companies, institutions or customers involved. The other reason is that Icelanders are very willing to adopt new technologies and tend to all jump on the same bandwagon in such cases. The percentage of Icelanders with Facebook accounts is for example among the highest in the world and it happened very quickly.”

Beyond social media, Iceland’s healthcare system and most other social systems are digitized. “The entirety of Iceland's population is digitized and searchable, says Paula Gould, digital marketing expert and long-time resident of Reykjavik, Iceland.

The cloud is everything here.  

What industries are benefiting most from Icelands digitization?

Among some of the most notable sectors that have adopted digital infrastructure in Iceland are tax offices and fisheries management.

Tax returns

The Icelandic tax authority moved to online returns long before most other nations, but the digitization of the tax system goes much further. With the digitization of salary payments, bank accounts, property records and most other financial information, the tax authority moved a number of years ago to a “check and submit” approach for most taxpayers in place of “fill out and submit.”  

See also: Country digitization plans take nations on the path to prosperity

Most individuals in Iceland only have to log into the tax authority service, read over the information already there and then submit the pre-filled tax forms. In most cases, the process takes mere minutes to complete. The foundation for this was the digitization of the banking sector, which is based on the banks having established a central billing and payment service decades ago. 

“Based on that, it was easy to digitize the entire banking sector, which happened a long time ago,” says Jónsson.

Gould adds that very few people in Iceland pay for anything with cash these days.

Sustainable fishing management

Iceland’s fishing industry is one of the main driver’s of the country’s economy, as it directly employs 9,000 people. In 2013, Iceland’s marine product exports came to ISK 272 billion (€ 1.7 billion). The rising management sector has a shared digital information system that provides invaluable real-time information for all parties involved; companies, ships, scientists and authorities.   

Scientific research is at the core of Iceland’s fishery management system. Fish stock assessments and data from the Marine Research Institute are used to decide what catch is allowable. Data is collected throughout the entire year and the information is submitted to the International Council for the Exploration of the Sea (ICES). This research and collaboration allows the institute to monitor stock development of different species and determine if fishing should be reduced or increased.

Well Managed Fisheries in Icelandic Waters from Gudny Karadottir on Vimeo.


How can the public and private sectors keep up with Icelands increasing digitization?

As the world becomes more connected the continued digitization of Iceland is inevitable. The question is in which areas will the country lead and in which areas will it lag behind. 

Jónsson says the size and nature of Iceland leads to development occurring in bursts.

“A sector will move forward as a whole in a short amount of time, but until that happens it will remain behind to a large extent,” he shares. “To make a move forward happen will require the coming-together of the necessary innovation to make it possible and the realization that investment in making the change will pay off.”

Jónsson adds that one of the biggest opportunities for making great advances in Iceland and across the globe is the digitization of the education system. However, while the students are ready for this, the technology is not.

“Innovation is needed to bring learning properly into the digital world,” says Jónsson. “And innovators are working on it, both in Iceland and elsewhere, and there are some very promising developments under way in using games for learning. Once the technology is in place, then there is the very challenging step of adopting the technology in a system that is based on completely different methods today. But once that happens, the benefits will be even greater than what the digitization of taxes or banking has provided.” 

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