e-Estonia - A Digital Nation leading Digital Transformation

e-Estonia – A Digital Nation leading Digital Transformation

Estonia, a small European country with a population of only 1.3 million, has slowly become a leader in the digital economy and dubs itself e-Estonia.

In 2000, Estonia declared the Internet to be a basic human right and started investing and innovating in digital governance. By 2003, the Estonian government had gone almost-completely online, with all government services available on the ‘e-Estonia State Portal’. In 2005, Estonia became the first country to deploy internet voting for their national elections.

This rapid adoption of technology now shapes the growth and innovation of the country. Today, all Estonian residents have a smart-ID card, which serves as the cornerstone of Estonia’s digital state. The card, which uses a 2048-bit encryption, is designed to connect with a smart reader and gives access to government services, banks, and even online voting. The card also allows the owner to digitally sign something.

Estonia’s aim has been to become a paperless society, and they have largely achieved it. Today, all their government institutions are online. Estonian citizens now file taxes online, use the internet to access their medical history and records, and use their digital signature to sign contracts or approve banking transactions.

e-Residency

The benefits of e-Estonia aren’t limited to Estonians only. In 2014, Estonia started the world’s first e-residency program; allowing individuals from anywhere in the world to become an e-resident and make use of its institutions. The e-Residency does not come with any physical residency rights or visa, or even any steps towards one. What it does come with is a smart-ID card and a USB smart reader which the e-resident uses to access services or use their digital signature.

e-Residents of Estonia can use their e-Residency, which costs only €100, to start a company, open a bank account, and even file taxes – from anywhere in the world. Why be present somewhere physically if you can prove your identity digitally?

Martin Lindpere of e-Estonia at CoDE Surrey Business School

Martin Lindpere at the Surrey Business School

A ‘once-only’ policy

Speaking at the Surrey Business School earlier this year, Martin Lindpere, Economic Advisor to the Prime Minister of Estonia, emphasised the “once-only” policy of Estonia. Efficient and effective use of digital technology means you never have to give any information twice; there is no redundancy. If you have informed any government service about any change, such as a change in address, you will not have to repeat that change to anyone else. Other government services, institutions or services like insurance will automatically become aware of the change.

This also means Estonians don’t have to carry multiple cards. Their identity, driving license, insurance, and everything else is all linked with their digital identity, which is held in their smart-ID card.

Lots and lots of Data

As you would have guessed, such a digital system means big data and the storage of large amounts of personal data. Big data has been a very popular topic among businesses, governments and even academia, who hold a lot of research interest in the subject. Fortunately, digital transformation has become part of the country’s culture.

“[Estonians] have overcome fears of an Orwellian dystopia with ubiquitous surveillance to become a highly digital society”

Assoc. Prof. Innar Liiv, Tallinn University of Technology

Estonian citizens own their data and have complete control over it. A government portal shows everyone all the data stored about them along with access logs that record everyone who has accessed it. Any intrusion or unrecognised party looking at your personal data can be reported, who will then have to justify why they looked at your data.

With the amount of data Estonia has, could the government use it to glean insights about the economy’s health and general economic trends? Data has already allowed Estonia to significantly reduce the amount of tax fraud committed; which just goes to show how going digital can help economies.

Such databases of data, however, don’t come without their own troubles; there is a digital blacklash. Estonia has to take cybersecurity very seriously. It has been a regular target for cyber-attacks and it poses a real risk for the country. Estonia experienced its first ‘cyberwar’ in 2007, which resulted in citizens being unable to use many services, including ATMs and online banking. It also brought down email services, which meant government departments couldn’t communicate with each other. Estonia is still subjected to attacks frequently, but with the lessons learned, the government is now confident in its abilities and continually reviews their technology to improve security.

e-Estonia, an ideal model?

“e-Estonia” is a live case study of a digital government, a culture focused on digital transformation and a government that has gone paperless. While many other countries are trying to implement bits and pieces of technology in different areas, like a universal smart ID card, none has come close to the success that Estonia has. Going all-digital comes with its own risk but Estonia believes the benefits outweigh them. Estonia has been able to accomplish this because they focused on digital transformation and viewed it as a priority; it also helps that they are a small nation. Could larger nations follow the same route? Or rather, should they follow the same route?

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About the Author : Muhammad Ali Ishaq

Impact Manager for the University of Surrey's Centre for the Digital Economy. His interest lies in digital marketing, analytics and entrepreneurship. He is also an amateur photographer. He tweets @iAliIshaq