Estonia the role model: lessons from Europe's #1 tech nation

Estonia's former CTO Taavi Kotka reveals how this Nordic tech unicorn factory became such a digital powerhouse
Taavi Kotka
Taavi Kotka

Picture this: you are finally ready to go abroad for your first holiday. There is only one caveat – you don’t have a passport yet, so you must apply for it before booking. As you scroll through the requirements and fees for the process, you realise that you will need to send off original documents as photocopies won’t be accepted (now, where did you put your birth certificate?). Things get even more complicated when you realise there are different processes depending on whether you were born before 1 January 1983 or after, and whether you were born in the UK or outside. For example, was your father born in the UK, or have you acquired British Citizenship by naturalisation? 

This example is one of the many that every UK resident goes through when dealing with public services. Even applying for a bank account still requires evidence of addresses where you have lived for up to the last three years. However, whilst the UK is stuck in the privacy debate, data sources remain disconnected, with public and private sectors running their own systems. Moreover, whilst the private sector leaps forward with technology, the public sector continues to work from legacy software and databases, requiring multiple identifiers such as NHS number, National Insurance number and/or Unique Tax Reference.

But if we look to a country like Estonia, we find a tech hub widely recognised as home to the world's most integrated digital government. Citizens can access and complete virtually all municipal and state services within minutes. You can register a company online and begin trading in just 18 minutes; or view your educational records, medical records, employment history, and traffic violations online, with the ability to correct inaccuracies or request changes directly. Unlike many other countries, the power to manage their data lies in the hands of Estonia’s citizens.

So, what can the UK and other countries learn from one of the most disruptive nations in Europe?

From the rubble of the Soviet Union to a digital fortress

Estonia has never been a country that ‘had it easy’, and digital transformation has been slow. However, after the Soviet Union collapsed in 1991, Estonia started rebuilding itself from scratch, having the same access (or lack of) to resources as other European countries. 

Due to its small population of just 1.3 million, digitalisation in Estonia has been driven by necessity. The low population density also implies that offering physical services to everyone is not feasible, so the country had to shift its focus to self-service and online access from the beginning.

Despite limited resources, Estonia made significant investments in its IT infrastructure. In fact, this lack of financial stability has been beneficial, forcing developers to ensure they avoided errors. In 1996, the Tiger Leap initiative was introduced to catch up with Western nations in IT infrastructure development, leading to 90% of Estonians using the Internet. The introduction of the World Wide Web launched a series of notable achievements, including the first e-banking service in 1996; the first e-tax board in 2000; X-Road (secure digital data sharing), e-ID and digital signature in 2002; and internet voting in 2005. Rapid progress has continued since then, with the country successfully establishing the infrastructure and systems required for e-government. Despite the journey taking over 30 years, its methodical progress has allowed Estonia to win the digital race in the long term.

Prioritising digitalisation

Digitalisation fosters both efficiency and effectiveness, and Estonia was agile way before the term itself was coined by different organisations. A crucial principle dictates that Estonian government software should not be older than 13 years, even if it functions properly. In contrast, some countries rely on outdated systems without questioning their optimality. It’s like comparing Uber and traditional taxi services - Uber is automated and efficient, while the latter requires assistants to handle bookings. As a result, Estonia's robust IT ecosystem allows its government to outsource the programming and maintenance of its technology, with the private sector being responsible for 90% of the work.

A digital government offers cost-saving benefits by significantly reducing administrative expenses. For example, Estonia stands as the world's most efficient tax collector, requiring minimal funds to amass a specific amount of tax revenue, thanks to its predominantly automated online system.

Crucially, digitalisation promotes transparency. Every digital transaction leaves a trace, making it simpler to monitor activities. Citizens can see who can access their data and set specific rules and permissions. With government services transitioning to an online platform, the role of government officials as middlemen becomes substantially minimised, thus curbing corruption. This builds the residents’ trust in the system and the government, creating better and easier lives.

Steps towards a brighter future

Establishing a robust digital government is not an easy ride. However, there can be notable benefits such as cost and time savings and a more inclusive and accessible government. Estonia's digital government is an inspiring example of how technology can revolutionise governance, enhance public services, and benefit its people:

1.     Digital identity

Countries should focus on uniting and digitising disparate systems to create one unique digital identity. Accurately identifying an individual in the digital space is a fundamental prerequisite for shifting sensitive data-based services online. Moreover, digital identities are a gateway to more innovative tools and services.

2.     Transparency breeds privacy ­

Privacy concerns are the primary barrier to digitalisation, and civil servants around the world perceive legacy systems and non-digital methods as the most secure. However, officials should not hesitate to embrace new technologies, even if it means venturing out of their comfort zone to reap the rewards of digitalisation. Interestingly, the UK was also once on the path to introducing digital IDs, but this initiative was quickly curbed by David Cameron in 2012 due to privacy concerns. Decades later, with disparate systems and databases, privacy concerns and cybersecurity remain one of the top challenges in the country.

3.     United buy-in

Establishing a thriving digital state requires the cooperation of various stakeholders, including citizens, politicians, civil servants, and tech specialists. Addressing the needs and challenges of each participant can be a complex task, and governments should anticipate short-term resistance. However, when technology simplifies the lives of citizens, digitalisation will eventually hold a positive long-term outlook. Equally, government officials should trust tech specialists in decision-making.

Estonia certainly provides a practical blueprint for others to aim for in terms of digital prowess. If countries like the UK adopt a data-focused and citizen-centred approach to government, they can pave the way for a more productive, honest, and innovative digital future.

Written by
Taavi Kotka
Written by
May 26, 2023