In order to develop business and ensure a more stable business environment, the World Bank came up with the idea of creating an analytical value-creating system based on business data in countries, which would offer support to companies in their development, but if necessary, would also warn against the risk of insolvency and difficulties.
In Estonia, Statistics Estonia, in cooperation with the Ministry of Economic Affairs and Communications, is developing a solution based on artificial intelligence, which will do this work for companies.
In short, the idea is to train the machine to help the entrepreneur. The solution will work as follows:
- evaluates the development of the company so far;
- proposes development scenarios and possibilities for their realisation;
- issues a warning if the solvency of the company is decreasing;
- explains the nature of the problem of reduced solvency;
- suggests to the company what to do and change in management to avoid a decrease in solvency;
- provides the company with an overview report on its financial status;
- acknowledges the entrepreneur when the company has improved its situation compared to the previous period;
- shows what has improved and how to keep on this track.
The artificial intelligence machine is like a partner that gets to know the company and starts guiding the entrepreneur. It is also a trustee of the company who does not share the received information with anyone other than the company. The state does not make any decisions or take any position regarding the company based on this.
How does the machine get to know the company?
Over the years, the company has submitted reports to the Tax and Customs Board, Statistics Estonia, and the commercial register, which adds up to a large amount of both general (annual reports) and more detailed (tax returns) data. By combining this data, it is possible to learn a lot about the company.
Each economic sector has its own operating logic and conditions. The artificial intelligence will learn the specifics of each sector. How? The machine is given parameters that characterise the economic indicators of the companies in the field of activity, and then, the machine compares the indicators of the companies operating in the sector with these parameters. This shows how, for example, a company serving tourists located in Viljandi should behave differently than a unit located in Tallinn, and thus, what the main success factors are for further developments.
Who will benefit most from the artificial intelligence solution?
The artificial intelligence solution is especially useful for companies whose financial management has not been able to identify threats and reorganise their operations. Often, such companies are too busy with daily activities and lack time for analysis, as well as resources for a more thorough implementation of financial management. Such companies are mainly small or medium-sized – they are already busy with maintaining their market share and, due to the high competitive pressure, cannot contribute enough to financial strategic development.
The artificial intelligence solution supporting companies should be completed by the end of 2023 in cooperation between Statistics Estonia and the Ministry of Economic Affairs and Communications, and the expected result is a smarter and more supportive business environment to prevent companies from getting into difficulties and, if possible, to eliminate these difficulties.
Time schedule
- Stage I prototype and testing: July 2022.
- Plan for creating an information system based on the prototype of stage I and creating a prototype for stage II: July–August 2022.
- Development work and presentation of the stage II prototype: September 2022 – February 2023.
- Creation and completion of the experimental development of the information system: October 2022 – December 2023.
Schedule
Stage I 2021-2022
Stage II 2022-2023
Budget
Stage I 62 000 euros
Stage II 749 400 euros