Sweden’s effective public administration and digital transformation

Having visited Vietnam many times over the years, what are the most significant changes you have observed in public governance and the administrative system, and how do these reflect the country’s broader development goals?

I grew up in Vietnam as a child and have returned about once every decade for the past 50 years, witnessing a tremendous transition. One of the most noticeable changes is the level of bureaucracy and how much more accessible information is today compared to the past. The country has already undergone significant digitalization, and as I understand it, its ambitions for further digital transformation are quite remarkable.

In your keynote address at the “Advancing Leadership in Public Administration: Innovation, Digitalization, and Effective Governance - Nordic Experiences and Policy Implications for Vietnam” seminar, on March 18, what key message do you hope to leave with participants about the path forward for Vietnam’s governance reforms?

Well, I’m not here to give advice but rather to share experience and insights. Having been part of Sweden’s digital transformation journey for a long time, I have seen the clear benefits that technological advancements bring. I will focus on efficiency, transparency, and the crucial role of accountability in public administration to build a society founded on trust and free from corruption. Transparency, in particular, is essential, as digitalized public administration enables better performance monitoring. This is key to fostering trust, especially between the public and private sectors, something vital for economic growth and business development. This has been a fundamental factor in Sweden’s progress.

Digital transformation is a recurring theme. In your view, how can Vietnam balance its ambitious digitalization goals with practical challenges, particularly in fostering inclusivity and trust in public services?

I believe education is key. It is crucial for Vietnam to continue investing in future generations, something the country has long prioritized. This has also been our experience in Sweden; education forms the foundation. With a strong educational system and widespread adoption of digital technology, innovation follows. Over the past 25 years, Sweden has undergone extensive digitalization, boasting the highest broadband penetration in Europe. This environment has fostered the growth of globally successful companies like Skype and Spotify. Sweden embraced digital education early on, encouraging people to adopt new technologies, which in turn drove innovation and economic growth.

From your experience working with Nordic models, what are the methods to foster a culture of innovation within public administration?

In one word: “trust”. Trust has been a fundamental pillar in all Nordic countries, characterized by the absence of widespread corruption and a strong belief from the private sector that the State operates fairly and prioritizes business interests. Much of Sweden’s success has stemmed from a close partnership between the public and private sectors. Many globally-recognized Swedish companies would not have thrived without active support from the State in areas such as investment and technological advancement.

This foundation of trust extends beyond government-business relations, it permeates society, fostering an environment where people feel secure enough to take risks. Knowing there is a reliable social safety net encourages entrepreneurship, innovation, and economic growth. This culture of trust, collaboration, and risk-taking has been instrumental in driving Sweden’s development.

Collaboration is at the heart of the Nordic spirit. How can the partnership between Sweden, other Nordic countries, and Vietnam be further leveraged to pioneer governance reforms and set an example for other countries?

I believe Sweden has valuable experience to share as Vietnam pursues its ambitious development goals for the next 10 to 15 years. We are more than happy to offer insights that may support Vietnam’s efforts. However, we also face significant challenges at our current stage of development, and I believe the experience Vietnam is gaining now will be highly relevant for us as we advance our own reforms.

This collaboration is very much a two-way exchange. While Sweden’s history may offer inspiration, we also have much to learn from Vietnam’s dynamic progress. Vietnam is undertaking some fascinating initiatives, and I see great potential for mutual learning and shared innovation.

Compared to other countries in the region, Vietnam’s insurance participation rate remains low, at only some 2 per cent of GDP, while the Asian average is 4 per cent and the global average is 9 per cent. Consequently, protection from risks is still quite limited in the country. What policies and solutions should Vietnam adopt to enhance this protection in the new era?

It depends somewhat on the type of insurance, but overall, insurance plays a crucial role in fostering a society where people are willing to take risks. In Sweden, the public social security system, which includes pensions, healthcare, and parental benefits, is extensive. This State involvement has been instrumental in enabling individuals to focus on innovation and entrepreneurship without excessive financial insecurity.

Another key aspect is that public insurance helps free up capital. When the State takes responsibility for fundamental social protections, individuals are less likely to over-insure themselves in the private market. This, in turn, allows more capital to flow into consumption and investment, driving economic growth. A well-balanced system that combines both public and private insurance can provide individuals with security while encouraging them to take initiative, innovate, and contribute to a dynamic economy.

For Vietnam, policies that strengthen public social security while fostering a robust private insurance market could help create a more resilient and growth-oriented society. Educating the public on the benefits of insurance, offering incentives for participation, and ensuring transparency and trust in the system will also be essential in expanding coverage.

Digital transformation has brought many positive impacts on the development of various economic sectors. Vietnam’s insurance market is also actively undergoing digital transformation to make services more accessible to users. However, it still faces significant challenges related to technological infrastructure and customer habits. What have been the notable changes in Sweden’s insurance market due to digital transformation? What can Vietnam learn from that?

The insurance industry is fundamentally about risk assessment, and digital transformation has significantly changed how this process works. In Sweden, digitalization has allowed insurers to rethink their approach. Traditionally, every insurance claim was individually investigated to determine whether it met the terms of the policy before a payout was made. Today, with advanced data analytics and automation, private insurance companies rely more on customers’ historical data to streamline decision-making.

For example, if a customer reports damage to their car or home or files a lost item claim, and they have a history of making infrequent claims, perhaps once every ten years, the insurer often processes the payment without a lengthy investigation. This shift has made the system far more efficient, reducing administrative burdens and improving the customer experience. Insurers can now use digital tools to assess risks more accurately, making decisions faster and more cost-effectively.

For Vietnam, the key takeaway is that digital transformation in insurance is not just about offering online services, it’s about leveraging data to enhance efficiency, trust, and accessibility. Developing robust digital infrastructure, improving data collection and analysis, and gradually shifting customer habits toward digital interactions will be crucial steps in modernizing the insurance market. Investing in AI-driven risk assessment models and automation could help Vietnam’s insurers provide faster, more reliable services while maintaining financial sustainability.

Could you provide some insights into how Sweden’s social insurance system is managed?

Sweden’s social insurance system is managed by two main administrative bodies. I oversee approximately 50 different types of insurance and benefits, while a separate authority is responsible for managing the pension system. These two agencies handle the largest share of Sweden’s social insurance operations.

Each type of insurance follows its own management logic and is administered differently based on its specific purpose. Currently, we are undergoing a digital transformation, increasingly adopting approaches similar to those used by private insurance companies. This shift places greater emphasis on risk assessment in case management. By doing so, we achieve several benefits: improved efficiency, more accurate processing, and significantly enhanced service quality for the public. Digitalization allows cases to be handled much faster, ensuring that individuals receive the support they need without unnecessary delays.

What do you think about the potential for cooperation between Sweden and Vietnam in the insurance market in the near future?

I believe there are many opportunities for both countries to learn from each other. With a population ten times larger than Sweden’s, Vietnam has a vastly different demographic profile. These differences create valuable opportunities for knowledge exchange. Vietnam is in the process of developing a more modern insurance system, which presents an excellent foundation for collaboration and shared learning.