Everyone knows that starting a business is one of the most rewarding challenges an entrepreneur can take on. It requires passion, grit and determination to overcome a variety of obstacles that will cross an entrepreneur’s path on any given day.
For UK startups, funding and talent acquisition are significant challenges because the market is crowded. Another hurdle many do not expect when they set about launching their business is the impact of complying with regulations and working through red tape. For early-stage startups, often consisting of only a few team members, managing regulations such as employment law and tax compliance can stretch resources thin, leaving little time for crucial tasks like business strategy, product development, and fundraising.
With digital entrepreneurship on the rise, establishing a digital identity has become a key advantage for entrepreneurs. A digital identity facilitates global operations, regardless of a founder’s physical location, while also streamlining governance and compliance. This is increasingly enhanced by the integration of AI, which is transforming governance from a burden to a business advantage. This article explores how AI is making an impact in key areas of digital governance: automating bureaucracy, redefining compliance, and shaping the future of digital identity. As AI continues to transform how we live and work, the changes it makes to these factors in particular will break down borders, and help entrepreneurs start and scale companies across jurisdictions with minimal friction.
Levelling-up digital governance with AI
Navigating paperwork, cumbersome tax filings, middle men and logistical hurdles are aspects of setting up and running a business many entrepreneurs would happily avoid. While the UK offers a robust governance environment (i.e., the evolving Government Digital Service or GDS) with its own set of advantages, and some funding to help small businesses adopt digital tools that will streamline admin, entrepreneurs are increasingly looking towards more advanced solutions to these age-old challenges.
Governments worldwide are now adopting digital governance models, with policies, strategies, and regulations that ensure the secure and equitable use of digital resources. IThis national-level digital governance involves policies, strategies and regulations aimed at ensuring the effective, secure and equitable use of digital resources across the country. In a nutshell, everything businesses need to do to run effectively can be done online. With many nations still requiring organisations to post physical paperwork back-and-forth, this is a big step up.
AI is now moving governance to an even more advanced level. It will mean that governance processes aren’t just digitalised, they’re automated. This has the potential to make setting up a business something that can take place rapidly. It also means running a business will be easier, for example if tax filings became a fully automated process. The use of AI-enabled data analysis and insights will help governments improve policy outcomes that benefit businesses, enhancing the ecosystem for digital entrepreneurship.
Redefining compliance with AI
Since the UK’s decision to leave the EU in 2016, many businesses have faced challenges in maintaining smooth trade relations with EU countries and accessing EU business grants. Brexit has created two billion extra pieces of paperwork for businesses according to research by the Chartered Institute of Export & International Trade. In more realistic terms, this translates into UK small businesses spending 120 days each year on admin tasks like compliance.
AI-powered automation and analysis offer a promising solution to streamline compliance. This arguably becomes more powerful as they grow, and create and accumulate more data that needs to be processed and managed according to data protection rules in the territories where they operate. These changes won’t just help businesses get their admin done more easily. They may also bring about commercial advantages, for example being able to easily demonstrate to investors that a new innovation checks regulatory boxes across markets.
It is important to mention that AI itself, as a new branch of technology, is currently navigating a complex regulatory landscape. Most nations are grappling with how to regulate an innovation that is constantly evolving, with the EU’s AI Act being acknowledged as the world’s first comprehensive AI regulation. This should be a key consideration for entrepreneurs as they use AI tools to support global growth, with the EU Parliament calling for AI systems to be safe, transparent, traceable, non-discriminatory and environmentally friendly.
A new age for digital identity
Digital identities are already seen as a business enabler for entrepreneurs who want to grow and operate across territories. This is particularly beneficial for UK businesses looking to access the EU single market without the bureaucratic hoops.
With AI applications, expanding to new regions with digital identities will not only be simple, this could almost become fully automated. This could also unlock a new level of globalisation led by ambitious small businesses, who can confidently, and securely, expand without the bureaucratic strain currently associated with entering new markets.
However, as with any new technology, caution is necessary to ensure AI-powered digital entrepreneurship remains ethical, secure, and safeguarded. While there are vast opportunities, it’s crucial to balance innovation with responsibility, ensuring that the digital landscape remains accessible and equitable for all.
AI is shaping the future of digital governance, and its impact on bureaucracy, compliance, and digital identity is empowering entrepreneurs to navigate global markets more easily and efficiently. These advancements will simplify regulatory processes and help entrepreneurs embrace digital entrepreneurship on a global scale.
