For Building the World's First Digital Country (Most Influential Projects: #42)
Forget Silicon Valley. It's a tiny former Soviet state that's masterminding an e-government revolution. With a continuous stream of bespoke electronic solutions, Estonia has used its digital-first environment to radically streamline services and bulldoze economic boundaries. With e-Estonia, people no longer even need to physically live in Estonia to be a resident. It's also established a bleeding-edge blueprint for other countries to follow.
After the nation gained independence in 1991, “there was a hunger for a better life,” says Linnar Viik, co-founder of the Estonian e-Governance Academy and program director of Smart Government. “As a very small country with a small GDP, we had to make ourselves attractive to investors and to the international economy.”
Government leaders went in armed with a clear vision of what it would take to grow its economy and best serve its 1.3 million residents. Delivering on that dream of a digital-centric government, though, meant agencies had to transform how they worked, says Siim Sikkut, government CIO, Ministry of Economic Affairs and Communications.
While other governments pursued traditional IT solutions, Estonia “needed to do something radically different,” Viik says.
Rather than indulge in high-cost tech solutions that would take years to complete, Estonia's leaders pivoted to innovations that could be completed in months with budgets in the hundreds of thousands, not billions, of euros.
“Our approach has always been to make projects smaller, so when they fail, we can recover quickly and learn from the failures,” Viik says. “If you start a digital project in 2020 that will be ready in five years’ time, it will be a dinosaur.”
Today, 99 percent of public services are available online. The only things Estonians can't do via the internet: get married, get divorced or complete real estate transactions.
Welcome, Digital Nomads
The high-profile superstar of Estonia's digital portfolio is its e-Residency initiative. Launched in 2014, it allows anyone in the world to apply for government-issued digital identity as well as services such as registering an EU-based company.
As they launched the effort, Estonia's leaders realized the government had to behave like the startups it hoped to foster. So it borrowed liberally from the tech industry, leaning heavily on agile.
“We had an iterative process to find out who e-residents were and what they wanted,” says Kaspar Korjus, former managing director of e-Residency. “Only by giving a raw product to customers can we understand how to develop it.”
Less than 2%
Portion of Estonians who voted online when the government launched e-voting in 2005
Portion of Estonians who voted online in 2019
Users were happy to help, providing feedback through questionnaires, emails, subscription newsletters and in-person events. As a result, e-Residency evolved: At the program's start, applicants were required to travel to Estonia four times, and all the e-Residency documents were in Estonian, which even Korjus admits “no one understood.” Now, candidates have to travel only once—to Estonia or one of its embassies—and the documents are also in English.
With 100 percent annual growth since its launch, the program now counts 70,000 e-residents, Korjus says.
But the team hasn't been afraid to make some timely pivots along the way. The original hypothesis, for example, was that most e-residents would want to create startups, so the program would need to provide them with related services. But the team learned that only a very small percentage of e-residents fell into that category. Many were digital nomads who sought e-residency so they could work globally and remotely with low administrative costs. And therein lies another opportunity: In the future, Korjus says, Estonia could collect taxes from e-residents in exchange for government services they're missing out on by being away from home. “Millions of digital nomads need a nation to support them,” he says. “This is a niche that Estonia will fill.”
Throughout their e-journey, government leaders have learned they must tailor initiatives to what Estonian citizens really need.
The e-governance team, for example, is now redesigning government services around 15 major life events, from birth to death. The goal: minimize and automate the government interactions that people have for each of those events. Instead of new parents having to head to a bunch of different government agency websites to start the process of giving an infant a name and applying for social benefits, the government will proactively go to citizens and ask them for all the data it needs about the child. “We will serve people better at the point of their needs,” Sikkut says.
Estonia ultimately aims to make government services automatic and invisible. “We want to improve the user experience with government services,” Sikkut says, “and the best experience is when Estonians don't have to do anything at all.”
Video calling service Skype was launched by Estonians at the start of the country's digital transformation and remains an inspiration for other startups born out of the e-Residency project. Estonia now boasts the third-highest number of startups per capita in Europe, and substantial investment in new digital disrupters is now the norm.
Investments to Estonian startups are increasing:
I've always been in awe of large-scale tech initiatives. For Estonia, in particular, building a digital-diverse nation without borders required an always-on curiosity. A futureproof talent pool helped the country blaze a trail of virtual offices, teams, companies and even residents. Driven by leadership, the program embraced diversity, collaborating across nations and cultures to achieve economic value.
—Priya Patra, PMP, program manager, Capgemini, Mumbai, India