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Release peace: the magazine

Analysis & Background Stories on International Affairs

Small Nation - Tech Giant: The e-Society of Estonia

Written by: Vincent Homburg

This article was written by Prof. Dr. Vincent Homburg who holds the ERA Chair of e-Governance and Digital Public Services at the University of Tartu. Estonia is world-renowned for its advanced e-Governance and e-Society policies.

Estonia: Where Digital Life is Everyday Life

Estonia, a small country at the eastern edge of the EU and NATO, has gained a reputation for being one of the most advanced digital societies in the world. Estonians can use their electronic identification cards to pay bills and sign contracts electronically. They can use the same infrastructure for accessing their medical records online. Estonians of the marrying sort – or those that have decided to split up – must get off their couches and physically show up in a government office, but basically all other government services are available fully online. Internet voting was already introduced way back in 2005. And should mayhem strike in Estonia, government services will be continued using backups of the country’s critical databases located over 1,500 km away from Estonia, in a digital embassy in Luxemburg. Estonia has also given birth to 10 unicorns, which in the tech world refers to startup companies valued at over US$1 billion. Examples of these unicorns are Skype (which is now owned by Microsoft), Playtech, Wise and Bolt.

A Brief History of Estonian Digitalization

A closer look at the history of Estonia suggests that the convergence of capital flows, information and tech skills in the country is far from a coincidence. The country’s digitalization accomplishments are intrinsically linked to its recent history. After a centuries-long history of foreign rule – Danish, Swedish, German, imperial Russian, and Soviet, to name a few – Estonia regained its independence in 1991. Its ambitions to move away from the Soviet legacy were impeded by a lack of capacity to develop a modern industrial economy. Estonia’s location at the northeastern edge of the Baltic Sea and with no railroads and highways whatsoever into the EU also did not help: Shipping raw materials, semi-finished and final products was prohibitively expensive. With necessity being the mother of invention, upcoming Estonian elites saw the opportunities that Western information and communication technologies offered. 

A key problem was that talent and tech skills were neither immediately nor readily available. Neighboring Finland’s economic success with Nokia provided food for thought for Estonia and it inspired Estonia’s first president, Lennart Meri to ask himself ‘What is our Nokia?’. Finland’s economic success with Nokia is attributed to intensive cooperation between government agencies, academic institutions and businesses in the 1990s. This inspired prime minister Mart Laar (in office 1992-1994 and 1999-2002) and later president Toomas Hendrik Ilves (in office 2006-2016) to team up with local financial institutions (notably Hansapank, now Swedbank) and academia. In line with the principles of frugal engineering, open-source solutions and in-house solutions were preferred over centralized, large-scale technological systems bought from external suppliers.

e-Governance through Infocracy

The emerging belief in technology as the core driver of the nation’s development spurred enthusiasm about creating a digital government. Traditional public management thinking boosts the idea that public services are delivered through public sector institutions that allow for political and public accountability. Having no legacy of existing Estonian bureaucratic  institutions allowed Estonian politicians and policy makers to embrace and implement modern public management thinking and develop government services using another logic. Core elements of this more recent logic are design thinking and an emphasis on the once-only principle to reduce administrative burden for citizens and businesses. In order to do so, Estonian public service delivery rests on two pillars: a so-called X-Road interoperability platform that allows data exchanges between public and trusted private sector organizations, and a compulsory national digital ID that allows citizens to access services digitally. Although Estonian government functions also rest on organizational structures separated by various agencies and departments, one could argue its public service delivery is driven by a logic of infocracy rather than by bureaucracy – at least in the front office of public service delivery.

The idea of citizen-centric public service delivery through digital means can be seen as an a manifestation of ideas that elsewhere remains an abstract thought. These practices are nowadays also a key part of the nation’s global branding. Seemingly, no business or study tour to Estonia can do without a briefing at the e-Estonia showroom, conveniently located near Tallinn Airport. The e-Government Academy is, through consultancy and training, involved in exporting Estonia’s experiences to countries around the world.  That being said, Estonia’s digital society is by no means restricted to a digital service economy and e-governance. It is also an identity, or modernist brand, with which Estonia emphasizes sovereignty beyond its geographical borders.

e-Governance in Estonia: A Cure for all Pains?

There are reasons to more critically reflect on the impact that digitalization has brought to the country. For instance, an almost naïve trust in technology coincides with relatively low levels of citizen satisfaction with crucial public services. Trust in the government is lagging behind levels measured in Scandinavian countries that Estonia has taken as examples in many ways. Although government services are designed to serve citizens’ interests, co-creation and participation are not Estonia’s strongholds. Further, it can be argued that the flirt with the idea of a digital ‘start up nation’ brings new kinds of risks – an influx from virtual poltergeist companies for instance, or fierce competition with other regions (the U.S. state of Delaware or fellow Baltic nation of Lithuania) that have borrowed some of Estonia’s digital society ideas.

Having said all this, Estonia is indeed a country that showcases how the ideas and concepts of an information society can manifest themselves in practice – in reality and in rhetoric, for better and for worse. Estonia can certainly serve as a case study of nation building in a global digital society, with digitalization being a token of sovereignty and national (brand) identity. Policymakers and experts that wish to develop their understanding of how a digital society and electronic government looks like can borrow plentiful from the realities Estonia lives by every day.

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