Essays
July 31, 2020

Country As A Service

Location: Tallinn, Estonia
Reading Time: 6 Minutes

To its north lies Finland, to its east lies Russia, to its south lies Latvia. The country I'm referring to is Estonia - the smallest of the three Baltic nations. Though, some would argue that Estonia is the sixth Nordic country. This small but mighty nation is approximately five-times tinier than my country of birth, the United Kingdom. And, to the unbeknownst, Estonia is home to the most meteorite craters in the world by area. With its innovative stance, Estonia is a nation I've come to admire since becoming one of its growing number of e-residents.

In 2004, thirteen-years after declaring independence from the Soviet Union, Estonia joined the European Union. Subsequently, in 2011, Estonia joined the Eurozone. Estonia was the first of the ex-Soviet states to join the Eurozone. Observers translated this as proof that Estonia had officially arrived in the West. For those who are unaware, the European Union is a unification of states, thus forming a political and economic coalition. The Eurozone is the monetary union of countries, members of which adopt the Euro as their sole and legal tender.

Sitting in a café on the edge of Tallinn's old town, weather reminiscent of England, I can't help but ponder that many countries can learn an incredible amount from Estonia. Since declaring independence from the Soviet Union in 1991, Estonia has challenged the notion of what it means to be a country through technological innovation. Within a generation, Estonia has gone from having limited internet access to being a leading digital state. It's hard to overstate the extent to which Estonia is a digital society. It's a common sight witnessing people access public services with their e-identification cards. The user could be doing a wide-range of things, for example: signing documents, voting, submitting taxes, even accessing educational material. In that sense, Estonia's approach to governing its citizens is truly one of service.

With their bloated governments, many nations are complicated beasts. But, at the core of every government is the mission to serve its citizens. As the world becomes more digitised, it's hard not to imagine a future where governments enhance the lives of their citizens digitally. Though digital innovation often gets birthed in the private sector, the opposite is valid in the Baltic state of Estonia. The state innovates at such a profound level, that talent from the private sector joins the public sector. Part of the reason for Estonia's success in establishing an e-government is due to its size and trust. For this reason, many larger countries disregard Estonia's e-government model. As valid as the arguments on Estonia's unique circumstances may be, there are still a plethora of lessons to be learnt from this digital nation.

Estonia has one of the most sophisticated digital infrastructures of any government. Estonia's data exchange technology is estimated to save eight-hundred-years of working time annually. The concerted use of digital signatures, in Estonia, saves it two per cent of its GDP per year. That's equivalent to the amount Estonia pays to meet its NATO threshold. The former president of Estonia, Toomas Hendrik Ilves, who seems quite the character, joked that Estonia got its national security for free. National security being of importance to Estonia, as Russia sits to its east. Estonia's successful e-government is a testament to the work they started in the 1990s. Essential projects included the likes of; digitising registers held by public bodies, building the X-Road platform, and providing its citizens with digital ID cards. With such an infrastructure established, Estonia considered how they could serve non-Estonians with their e-services.

Estonia launched its e-residency programme in December 2014. The programme allows anybody in the world to become an e-resident of Estonia, without ever visiting the country. It's important to note that e-residency doesn't equate to residency in Estonia. The purpose of e-residency is to allow the growing number of location-independent workers, to access Estonia's digital services from anywhere in the world, including setting up and running a business hassle-free. I applied for an Estonian e-residency in 2018, it took less than thirty minutes. The application cost me one-hundred euros. And, after approval, I picked up my e-residency from the Embassy of Estonia in South Kensington, London. In 2020, Estonia claimed to have 66,000 e-residents, 10,000 of which have set up companies. This figure is growing year-over-year.

Estonia has the lowest business-tax rates in the European Union. Coupled with its hassle-free approach, Estonia is an ideal base for entrepreneurs. Estonia enables entrepreneurs to accumulate a lot of capital while being law-abiding taxpayers (taxes get paid wherever the value gets created). This small Baltic nation, home to 1.3~ million people, has produced four unicorns (a company which is worth over one billion dollars). Estonia's innovative model allows it to compete for talent on a global scale, in much the same way a private enterprise would do.

Estonia's president, Kersti Kaljulaid, is the country's first female president, and youngest. In front of European leaders, president Kaljulaid stated that she is the president of a digital society. In contrast, the former prime minister of the United Kingdom, Theresa May, said that if you believe you're a citizen of the world, you're a citizen of nowhere. From afar, it seems that president Kaljulaid's approach is more fruitful. Many of the European leaders have applauded Estonia on being a pioneer in e-government. But, it should get noted that Estonia's success in forming an e-government goes deeper than implementing technology. It's more so the optimistic mindset that Estonia and its citizens have concerning e-government.

Security forms a crucial part of e-government. Though Estonia is cutting-edge in this regard, with its e-identification cards containing chips, for people to identify themselves unambiguously, it has been prone to issues. In 2017, the hardware underpinning this technology was declared vulnerable. The government acted quickly and fixed the problem. Hypothetically speaking, if Russia suddenly invaded Estonia (in 2007 Russia launched a cyberattack on Estonia), resulting in leaders having to evacuate the country. Leaders could log into their Luxembourg data centre and execute orders digitally. Estonia's 'data embassy' in Luxembourg stores a backup of its systems. As it's an embassy, it gets classed as being on Estonian ground.

In an interview with the New Yorker, Marten Kaevats, the National Digital Advisor of Estonia, said the following about the US"The US is a technical mess. The data architecture is too centralised. Citizens don't control their data. For example, I can tell you my identification number - I don't fucking care. In the US, your Social Security number is some big secret. The US has a backward notion of what protection means, that has resulted in a bigger problem: systemic loss of trust."

As implied by Marten Kaevats, Estonia's National Digital Advisor, the data of citizens isn't stored centrally in Estonia. The Estonian government has a platform called X-Road. X-Road links to individual servers through end-to-end encrypted pathways, hence data lives locally. Each time someone glances at that data, be it a doctor or banker, it is recorded. e-Ambulance is an excellent use of X-Road. In the instance of a paramedic arriving at the scene of an accident, they can use e-ambulance to access the victim's medical record. Beyond X-Road, the backbone of Estonia's cybersecurity initiatives is a blockchain called KSI. KSI is a blockchain technology that was developed by Estonian cryptographers; it powers Estonia's e-law, e-justice and e-police.

Many countries should be embracing Estonia's approach to e-government to remain competitive digitally. It's too easy to say that government doesn't work. Estonia is proof that it does. Nations should aspire to create functioning e-government's, doing so will ensure they don't become uncompetitive. Initiatives like this don't happen in one term. It is why successive governments need to follow through with the creation of an e-government. Estonia has been doing it since the 1990s.

On the subject of e-residency, small countries, in particular, should be encouraged to replicate Estonia's e-residency programme. Because, the more people and companies that engage with a nation's business environment, the more clients there will be for companies in that nation. E-residents not only establish companies in a country, but they use services in that nation. They use the banking system, payment providers, accounting services, legal support and more. The more clients a nation's companies gain, the bigger a nation's growth potential will be. Learning how to accommodate these companies produces positive results. Estonia has already consulted many states on its approach to forming an e-government. And, with a vision to serve ten-million e-residents, countries should follow Estonia's footsteps to become a country of service.