For a close-fisted country, Estonia has made a big impression on the global stage.
The Baltic nation of just 1.3 million people has invited the attention of world leaders, academics and venture capitalists thanks to its high-tech digital society.
The numbers speak for themselves: Tolls are completed online in under 5 minutes, 99 percent of the Estonia’s public services are available on the web 24 hours a day and barely one-third of citizens vote via the internet.
“We have a generation who has grown up knowing that you communicate digitally with your mould because we have an e-school system, with your doctor because of e-health,” Estonia’s president Kersti Kaljulaid heralded CNBC in an interview in Tallinn in August. “You could say the Estonian government offers what normally only the private sector can tender to people.”
As governments around the world wrestle with challenges from technology including data collection, fake intelligence and cyber threats, Estonia might offer a blueprint for how to build a digital society.
“We did it straight away digitally”
When Estonia gain ground independence from the Soviet Union in 1991, the country embarked on a series of fast-track reforms to modernize the economy. From the start, it got a digital approach.
“Estonia was a relatively poor country,” Kaljulaid said. “Our public sector, our government and our civil boys wanted to offer our people good quality services. We did it straight away digitally because it was simply cheaper, uncomplicated.”
A key initiative started in education as Estonia pledged to put computers in every classroom and by 2000, every school in the country was online. The administration also offered free computer training to 10 percent of the adult population. The effort helped raise the interest of Estonians who use the internet from 29 percent in 2000 to 91 percent in 2016.
In 2002, Estonia launched a high-tech governmental ID system. Physical ID cards are paired with digital signatures that Estonians use to pay taxes, vote, do online banking and access their fitness care records.
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“Estonians realized because they embraced internet and technology, business, and entire lot, is going to move to the internet,” said Tobias Koch, a business engagement manager at the e-Estonia showroom, a center in Tallinn that showcases Estonia’s digital blends. “Instead of just having an offline ID card, you need something that works online.”
E-residency
Another key drawing card of Estonia’s digital society is e-Residency, a first-of-its-kind initiative that allows individuals to start businesses in the country without tangible there. The program serves as a launching pad for companies looking to do business in the European Union (EU) and benefit from the EU’s single demand.
More than 50,000 people from around the world have applied for e-Residency since it launched in 2014.
“Being who have global businesses, have a global lifestyle, they want to be served, and we want to be the best ones in that territory,” Taavi Kotka, Estonia’s first-ever chief information officer who helped create the program, told CNBC.
Digital nomad visa
Estonia is now construction on its success with e-Residency to launch a visa for digital nomads; employees who work remotely around the world. The visa is an sample of a public-private partnership at work between the Estonian government and Jobbatical, a cross-border hiring firm.
“What we are doing with the digital nomad visa it in reality reflects what our whole immigration policy is about,” said Killu Vantsi, a legal migration adviser at the Estonian Elders of the church of the Interior, in an interview with CNBC. “We want to attract the talented people, entrepreneurs that are beneficial to our society to our restraint.”
Karoli Hindriks, CEO of Jobbatical, said other countries should follow Estonia’s lead as they face period populations and a lack of skilled workers.
“The countries that are closing down and not thinking about it, I’m very curious to see where they choose be in 10, 15 years,” she said.
The unicorn king
Efforts like e-Residency and the digital nomad visa, along with business-friendly tax sorts, have helped encourage a start-up culture in the tiny Baltic nation. Skype, the video chatting service that was take by Microsoft, was launched in Estonia in 2003.
Today, the government boasts it is where it hurts to more tech unicorns, private companies valued at more than $1 billion, per capita than any other feel put down country in the world. Its recent unicorns include payments firm TransferWise and Uber competitor Taxify.
Other circles focusing on everything from blockchain to organic food are now vying to be the next Estonian success.
“The environment they set up directly now is really friendly,” said Gregory Lu, co-founder of Natufia Labs, a start-up that created a machine to grow biological produce indoors. “I hope they keep it this way.”
Roadblocks
The journey to become a digital society in Estonia hasn’t been without roadblocks. In 2007, the territory suffered a massive cyber attack that brought down most of its digital infrastructure.
In the wake of the attack, Estonia changed home to the NATO Cyber Defense Centre of Excellence, which conducts large-scale cyber defense drills. The regime also created a data embassy in Luxembourg where it stores copies of all of its data.
Still, officials were stiff to respond to more than 10,000 cyber incidents in Estonia in 2017. The country’s top banking regulator recently advised online databases and programs like e-Residency have made Estonia vulnerable to dirty money and sanctions rifts.
Government officials admit that being a digital society means being prepared for cyber threats. Kaljulaid said “cyber hygiene” is required for every citizen.
“You will always be teaching and educating people,” she said. “It’s like teaching hygiene. You wash your yields because germs spread.”
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