Digital Estonia

The Maldives, as a digitally developing country, is far from reaching the greater heights of digital transformation. In this highly digital era, the country lags behind in shaping a favourable legal system, in establishing secure data exchange and in implementing a nationwide digital identity. Whilst many agree a digital identity is important in providing efficient public service, the vast majority sees current internet speeds and the wide digital divide across the nation as a huge handicap in moving forward.

The Maldives is day and night from the Baltic country of Estonia. For a small country with just 1.3 million citizens, Estonia has made a big mark on the global stage thanks to its high-tech digital society. The country embarked on a series of fast-tracked reforms to modernise its economy after gaining independence from the Soviet Union in 1991. Today, the country provides 99% of its public services online, including electronic voting, banking, and among others, utility payments. The nation’s sophisticated, yet robust digital ecosystem is regarded as efficient, secure, and transparent.

How did this small country make such progress in going digital?

Estonia had it all digital from the very beginning simply because it was cheaper and easy. The path to digital transformation was led by patient digital-minded leadership and understanding the characteristics of what digitisation necessitates – courage to experiment and patience to let big changes take effect. One example is how the online tax declaration came into effect. The Tax Board after realising the benefits of timely tax declarations outweighed potential risks, decided to experiment on how they would encourage people to start using online service. By urging them to declare taxes online, the citizens gained tax returns within five days resulting in a more efficient process. Today the Tax Board of Estonia annually request citizens to hold back tax declarations, to avoid overwhelming the system on the first day.

The majority of Estonia’s public databases are linked to each other, where dozens of databases are integrated and requires for data to be submitted only once. The digital state is primarily owed to the effective public-private partnership from the beginning ensuring necessary stakeholders to be in the loop of established plans. By combining public and private sector forces and mutual acknowledgement of shared responsibility, goals were upheld.

In 2002, the country launched its high-tech national ID system where Estonians save virtually everything onto their ID cards – from biographical data to prescriptions from doctors. The Digital Identity Card owned by 90 percent of citizens, makes everything much quicker and efficient in both private and business realms. Estonians complete bank transactions, tax returns and even finalise contracts in a matter of minutes and can no longer imagine such a process taking even a couple of days. The result of this astonishing transformation has eliminated unnecessary waiting time, paperwork and achieved efficiency through the one ID card for all matters.

e-Residency, an initiative of the Estonian government, allows individuals to start a business in the country without physically living there. Since its launch in 2014, more than fifty thousand people from around the world have applied for e-Residency. The program was created by Estonia’s first Chief Information Officer, Taavi Kotka. The program was targeted for companies looking to do business in the European Union (EU). Likewise, the Estonian digital nomad visa allows remote workers to live in Estonia and legally work for their employer or their own company registered abroad. Launched in August 2020, the country provides the opportunity to work in Estonia virtually eliminating the need to abuse a tourist visa.

While digitisation is the driving factor in Estonia’s modernisation and economic growth, efforts such as e-Residency, the digital nomad visa along with business-friendly tax rates have encouraged a start-up culture in the nation. At the moment, the country is home to more tech unicorns — private companies valued at more than USD1 billion — than any other small country. Everything from blockchain to organic food are now prospective staples of the next Estonian success.

High-end digitisation has also led Estonia into vulnerabilities such as the massive cyber-attack in 2007 that brought down most of its digital infrastructure. However, in the wake of the attack, Estonia became home to the NATO Cyber Defense Centre, which conducts large-scale cyber defense drills. The government immediately created a backup data embassy in Luxembourg. Ever since, the government has put even greater care in educating and teaching cyber hygiene to its citizens. Despite the attack, Estonia did not deter from its digital course and the misuse of private data sees harsh punished in the country.

Bottom-line

Digital transformation while it promises great benefits may also put the whole nation at risk in terms of cyberthreats. Yet Estonia is an inspiration to countries around the world. While the exact digital solutions adapted in Estonia may not work in other countries the same the global pulse is increasingly towards an ever digital landscape. Effective digital strategies must be shaped factoring in the local context and taking into account everything from legislation to culture. To begin with, a small country such as Maldives, can establish long-term strategic goals backed with diagnostic studies of the current digital state and establish a package of required legislative and policy reforms. With a firm, medium to long term plan in place, the nation should embark upon its digital future with sure, undeterred, momentum because the future is indeed digital.