ESTONIA: SHOWCASING THE DIGITAL FUTURE OF CITIZENSHIP
Estonia is a small Baltic nation with a population of only 1.3 million and a land mass of just 4 million hectares, more than half of which is covered by forest. But, it has proven itself to be a giant global winner in terms digital innovation.
Gaining independence from the Soviet Union in 1999 without the blessing of any natural-resource industries other than logging, the country had to innovate to survive. The groundbreaking video-chat technology Skype was created by Estonian software engineers in 2003, creating an anchor inspiration that helped transform Estonia into a startup nation. More recent successful Estonian startups include TransferWise and Pipedrive, but Estonia’s digital transformation of its public administration has been truly revolutionary.
“E-Stonia” moves toward a digital society
The Estonian national government made powerful early moves into digital. While only half the country had a telephone line in 1991, 97% of Estonian schools were online by 1997, a free government WiFi network covered urban areas by 2002, and e-voting was introduced in 20071. However, two recent government initiatives have been transformative at the global-level: e-identity and e-residency.
The e-identity program has given every Estonian a state-issued digital identity. Unlike traditional identification cards, Estonian IDs carry chips with embedded files and public-key encryption to prove identity through digital signatures2. As a result, Estonian governance is essentially paperless. Citizens use their e-identities to secure access to government services, such as health, education, and mobility programs. Estonians also leverage their e-identities for public records purposes, such a tax claims, land titles, or medical histories. Finally, citizens use their e-identities to interface with third-party companies, such as setting up a private bank account online. The e-identity program dramatically reduces costs for the public sector, enhances convenience for citizens, and cuts down on the environmental impacts associated with physical verification of identity.
E-residency extended Estonian digital transformation even further. In 2015, Estonia became the first country to offer e-residency, a program permitting citizens of other countries to become residents of Estonia without even needing to visit the country in-person. Through e-residency, foreign nationals become an Estonian digital citizen. By completing a simple registration process, e-residents can register a company, file taxes, and use all other services available to local Estonian citizens4. The vision is to provide secure and effective digital services for global citizens who are investors, entrepreneurs, students, freelancers, and others, allowing them to contribute to the Estonian digital society and economy5.
How did they do it?
Trust – Giving all this data and access to the Estonian government requires a huge amount of trust from its citizenry. Concerns about personal privacy and mismanagement of personal data have torpedoed similar transformations in other countries. But, Estonia has used transparency and security to assuage these concerns and push the public mindset toward digital adoption.
Blending transparency & security – A crucial feature of Estonia’s digital infrastructure is block-chain technology, which keeps a transparent public record of events. Some information, such as business and land-registry, are publicly available. This promotes societal openness. However, citizens own all the private data recorded about them, and they can always see who has enquired information about them. Improperly peeping at secure data is a criminal offense. For example, anytime anyone glances at a person’s medical record, that look is recorded and reported; if it’s not an authorized doctor, you can pursue the offender6. Finally, no digital system is immune from all security issues, but the Estonian government fights back with transparency. In 2017 scientists discovered a theoretical security flaw in the chip of digital identity cards, but rather than stealthily avoiding the issue, the Estonian government went public immediately and called for private-public collaboration to resolve the issue7.
All in all, Estonia’s digital republic provides an inspiring vision of how citizens can benefit from governments who win in the digital age. It requires serious trust built on transparency and security, but the endless benefits have only just begun to be explored and realized.
1 – Ben Hammersley, “Concerned about Brexit? Why not Become an e-Resident of Estonia?”, Wired, March 27th, 2017, http://www.wired.co.uk/article/estonia-e-resident
4 – The 2017 Digital Evolution Index, The Tufts University Fletcher School and MasterCard, https://globalrisk.mastercard.com/wp-content/uploads/2017/07/Mastercard_DigitalTrust_PDFPrint_FINAL_AG.pdf
5 – Joyce Shen, “e-Estonia: The Power and Potential of Digital Identity,” Thomson Reuters, December 20th, 2016, https://blogs.thomsonreuters.com/answerson/e-estonia-power-potential-digital-identity/
6 – Nathan Heller, “Estonia, the Digital Republic,” The New Yorker, December 18th, 2017, https://www.newyorker.com/magazine/2017/12/18/estonia-the-digital-republic
7 – Erik Ehasoo, “Case Study: How Estonia Become the Global Digital Leader and What Businesses Can Learn from it,” Rubiks Digital Blog, September 17th, 2017, https://blog.rubiksdigital.com/how-estonia-became-the-global-digital-leader-83e1ff576f36