Taavi Kotka shares 5 key lessons from Estonia’s digital success

Article by Hanna-Riia Allas and Riley Kaminer

In a webinar held by the Cambridge University Technology & Enterprise Club together with the Cambridge University Estonian Society, Taavi Kotka, an Estonian IT-visionary shares the story of building a successful digital nation.

Who is Taavi Kotka?

Taavi Kotka is an Estonian engineer and entrepreneur with an impressive resume: he has been the CIO of the Government of Estonia; one of the leaders of the Estonian e-Residency program; an IT-area advisor to the Vice-President of the European Council; and the CEO of Nortal, one of the largest software development companies in the Baltic States. Kotka currently holds the position of Head of Jio Research Center in Estonia, working to help India follow in the footsteps of Estonia and become the next digital society.

Why does digitization matter?

Digitization enables efficiency and effectiveness. A digitized government is cost efficient, since administration costs are greatly reduced. For instance, as Taavi Kotka mentioned in his talk, Estonia is the most efficient tax-collector in the world, meaning that the least funds are required to collect a certain amount of tax money thanks to the largely automated online system.

Importantly, digitization creates transparency: since every digital transaction leaves a trace in the system, it is easier to keep track of suspicious activities. As government services are transferred online, the role of government officials as intermediaries is greatly reduced, therefore preventing corruption.

An easier life is perhaps the most obvious benefit of digitization. As an Estonian, Hanna-Riia would highlight the following few benefits:

• ID card. An ID cards is an identity document with digital functionality, which is compulsory for every Estonian citizen. This single document can be used to perform a variety of tasks, such as giving a digital signature, logging into online banking services or buying prescription drugs; it works as a driver’s license, a customer card in stores, a library card and even a ticket carrier in public transport.
• Electronic voting. Estonia is the first country in the world to enable e-voting in national elections, a convenient innovation which allows citizens to vote from anywhere in the world. During the last parliamentary election Hanna-Riia happened to be abroad, but thankfully could use the e-voting service from several thousand miles away.
• Online services. Using online services instead of physically traveling to government agencies or filling in piles of paperwork is straightforward and saves time. Tasks such as changing your address or applying for a new passport can be done online, so it was for example quite puzzling to have to send in a UK student loan application on paper.

How has Estonia become a digital pioneer?

Digitization in Estonia has been driven by necessity, Kotka explained. As the population of Estonia is small–about 1.3 million–there simply “are not enough people to serve people.” Additionally, the population density is scarce and it is impossible to have all the services physically delivered to all the people, so the country had to push towards self-service and online services from early on instead of employing a number of bureaucrats.

Kotka made it quite clear that the digital transformation has not been easy. Estonia had to start rebuilding itself as a country in 1991. The assets were few but the investments were great. This lack of capital might have been a good thing in the end, Kotka ventured, as the developers simply could not afford to fail. In 1996, the Tiger Leap initiative was launched to catch up with the Western countries in IT infrastructure development. As a direct outcome of this initiative, 90% of Estonians would use the Internet daily. New accomplishments followed quickly: the first e-banking service in 1996, the first e-tax board in 2000, e-id and digital signature in 2002, internet voting in 2005. In 2007, Estonia already made headlines internationally, being the first country to use online voting in parliamentary elections. Rapid developments have followed and are ongoing to this day (find out more here). Establishing the infrastructure and systems of an e-government took years, but proved successful: “now we are happy to have had the patience,” Kotka claimed.

Lesson 1: Digital identities are key

Perhaps the most important takeaway point of Kotka’s talk is the importance of a unique digital identity. Kotka pointed out that in the Western European countries, every organization, every bank or GP practice has a separate system of identifiers, but there is no nationwide system. However, every Estonian citizen has a state-issued digital identity. A national identification number is assigned to every Estonian for life and this effectively serves as a ‘digital name,’ enabling reliable digital authentication. As Kotka put it, “How many John Smiths are there in the UK? Thousands? There is no way you can tell them apart!” But the ability to reliably identify a person in the digital world is the crucial prerequisite of moving services that use sensitive data online. And digital identities are the technology that unlocks the door for more innovative tools and practices.

Lesson 2: Privacy is in the eye of the beholder

Why haven’t more countries around the world digitized to the same extent of Estonia? Kotka notes that one of the major barriers to digital upkeep is a concern over privacy. In his experience working with countries around the world, he has noticed that civil servants view legacy systems and non-digitized protocols as the most secure. But Kotka’s advice is to “not shy away” from new technologies, pointing at the idea that government officials might have to step outside of their comfort zone to take advantage of the benefits of digitization.

Lesson 3: Digital governments require significant buy-in

Creating a successful digital state requires the collaboration of a wide range of stakeholders: from citizens to politicians to civil servants to technologists. Balancing the needs and pain points of each of these participants can be an arduous task. Kotka warned that government officials should prepare to deal with resistance in the short-term. However, he sees that the long-term outlook of digitization is typically positive. Citing Estonia’s successful e-Prescription initiative, Kotka argued that as long as government tech initiatives are tangibly improving citizens’ lives, they will eventually come to use a digital service.

Lesson 4: Buckle up… building a strong digital government can be a long, sometimes bumpy ride

When considering digitization, Kotka believes that it is best to have a long-term perspective. He mentioned a litany of challenges to overcome: budgetary restrictions, fickle political trends, technological hurdles. In the Estonian case, Kotka said that the investments in digital government they were making were significant, which led to a feeling that they “couldn’t afford to fail.” Kotka acknowledges that this was a successful strategy: “we had to keep trying to make it work, and now we are happy to have had the patience.”

Lesson 5: Trust the tech experts

“In Estonia, we trust our engineers,” Kotka proudly proclaimed. Keenly listening to the inputs of technologists enabled Estonia to take advantage of the most advanced and accessible technologies. He argued that non-engineer stakeholders from the very beginning of government digitization efforts understood the limits to their technical knowledge. This led officials to keep an open mind about what was and wasn’t possible from a technical perspective, while also allowing tech experts to focus on what will make the systems work the most efficiently.

Bonus: Tips for students and those interested in GovTech startups

Kotka urged entrepreneurial students interested in working with the public sector to “think outside of the box” when it comes to solving problems facing government organizations. He emphasized that the best way to have a positive impact on society is to “challenge the current system in a new way” and “try to be innovative.”

For young talent looking to work with GovTech firms, Kotka argued that entrepreneurs should “do only reasonable things, do only things that matter.” In Kotka’s estimation, the best GovTech companies solve problems directly affecting the public sector, rather than responding to the whims of politicians who “want to do something just to look good in the eyes of the voters.”

Digital government in Estonia and beyond

Kotka demonstrated that building a strong digital government is not necessarily a straightforward task. But doing so can create significant cost and time efficiencies, while also promoting more inclusive and accessible governments. While he emphasized that “Estonia didn’t do anything extraordinary,” it is true that the country offers a useful framework through which others can strive for digital excellence.