Sidewalk Talk
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Sidewalk Talk

Tallinn, the capital of Estonia, one of the most digitally enabled places in the world. (Image: Julius Jansson / Unsplash)

When Covid struck, Estonia was ready. Here’s how

Digital transformation advisor Anett Numa explains that Estonia had been “preparing for the crisis for the past 25 years.”

The small Baltic nation of Estonia is one of the most digitally advanced countries in the world. Estonians do everything online — from filing taxes, to launching a business, even voting. This powerful digital infrastructure left the country perfectly positioned for the all-remote lifestyle that Covid-19 demanded.

“We already had 99 percent of the services already available online, and we signed all of our documents online,” says Anett Numa, a digital transformation advisor at the e-Estonia Briefing Centre. “We don’t really use papers here.”

Anett’s job entails helping governments around the world understand how they can achieve a digital transformation on par with Estonia’s. I met her in the summer of 2019 — on a reporting trip to the country — and I called her back once the pandemic struck to see how things were going. The only real difference post-pandemic? All the video meetings.

“I used to travel almost every other week to some other country to deliver a keynote at a conference or to meet with government agencies from across the world to inspire them with the success story of Estonia,” she says. “What I’m doing right now is just showing my apartment to different government members from across the world.”

Anett spoke to Sidewalk Talk about how Estonia became E-stonia — and how embracing digital technology has improved quality of life in just about every imaginable way. (You can hear from Anett and other Estonians in our City of the Future episode on remote work.)

Why was it that Estonia was so prepared and perhaps better prepared than other countries to so quickly make that transition to digital learning and working?

I would say that we were preparing for the crisis for the past 25 years. We obviously would have never thought that this situation was coming, but we were somehow preparing for it already since the beginning of the year of 2000.

The only thing that has changed now is that we have all the meetings happening online. Otherwise, we were pretty prepared, and especially for the educational field. For more than 20 years, we have had school-managing systems where all of the grades, assignments, communication is happening on one single online platform. The platform that parents are able to use, the platform that students are able to use, and of course, the teachers. They were already used to using these platforms and it was not anything new to them.

Would you mind painting a picture of 25 years ago, during the country’s decision to invest in digital infrastructure? Why did it matter then as the nascent Estonian government was looking to the future?

Estonia regained its independence in 1991. We were under Soviet Union occupation and, all of a sudden, we were an independent state — and where do you get your money, right? We couldn’t afford to start building tax and custom board offices on every single island. [Editor’s note: Estonia is home to more than 1,500 islands.]

Luckily, Estonia had great leadership that time. Our government was formed by politicians of a very young age. Our prime minister was in his thirties. He said, “Maybe technology is able to help us here. Maybe it’s time when we do not need to have physical offices anymore.” We also had a lot of help from the private sector and academia since the very beginning, and also our fantastic Scandinavian friends supported us a lot by helping to cover Estonia with internet connection and make it accessible everywhere.

Step by step, we started developing different services but, of course, it took some time and did not happen overnight. Even preparing the legal background took some years. The very first service that we started providing was tax declaration. Since 1999, we were able to declare our taxes online already. In the U.S., sometimes you have to find an accountant if you want to do your taxes. Here, it just takes us one or maximum two minutes. Then, in two weeks time, I would get my return back to my account. Fantastic, right? We are keen to provide the best user experience and run our services smoothly and fast.

Since the beginning, we started a project that was called Look@World targeted for citizens who did not have enough knowledge on how to use digital services. The government paid for the courses, and 10 percent of our entire population was participating. Today, 97 percent of the people that are 65 and older are applying for their pension online. If you want to provide services online and make citizens able to use them, then education is a place where you should start.

How did you get people to trust these online services?

Trust is the main aspect here. We can’t underestimate it. We made everything very transparent.

We have a saying: each citizen is the owner of the information and data, and the government is just there helping us to store this information. Every single Estonian citizen can also track what information different government agencies are storing about them, and track if different agencies have been exchanging their information.

We do have this “once-only” policy. For example, my home address is only stored in one single platform that’s called Population Registry, and no other institution knows where I live. They do not have a right to store this information in a duplicated way. If someone is asking the Population Registry about my home address, then I will get to know about this as well. And of course in order to be able to request this information, different agencies need to have mutual agreements to exchange data.

If you want your citizens to use the services, then as a first step you have to make them trust the services, and it should be the responsibility of every single state to provide as much transparency as possible.

All these services use a backend system called X-Road, created by a company called Cybernetica, which you’ve used since 2001. Could you explain the X-Road system and how it’s more secure?

Every single institution who wants to operate in Estonian markets and exchange information has to join this system. It’s an open-source data exchange layer. X-Road just helps you to make the data readable and exchange it securely.

There is honestly no institution who can access all of our information, not even the police. That’s very important. Every single time the different institutions are changing my information, I can see this on my logbook system. At the same time, everything gets timestamped and it’s also encrypted. We use also blockchain in some institutions so they are exchanging hashes, not the actual information.

The other thing that you have is this ID card, right? How does the ID card work?

Yeah. We do have this also since 2002. Every single person in Estonia needs to have this card. It is a mandatory document. The ID card does not store any information about you on the card itself. There is just your name and your personal code and there is a chip.

We use our ID cards for many other reasons as well. It is also my driving license. I get access to my prescriptions also by my ID card. I do not need to have any paper. I can just call my doctor and they can make me a digital prescription which will be based on my ID card. This is also, by the way, a loyalty card, library card, and many, many other things. We try to keep it that way, so people would only have to carry their bank cards and then the ID card, and that’s about it.

And you can use the ID card to vote online as well?

Absolutely. We have been voting online also for the past 15 years now. We can do this wherever we are in the world.

The reason why we very much needed to have online voting available was because Estonia has only 34 embassies in the entire world, and there’s more than 200 countries, right? If people travel or if they live abroad, then it’s very difficult to still be able to vote, obviously. We are a small country, so it’s tricky if you would lose so many votes, and there are around 200,000 Estonians that are abroad by the time of elections.

When we had our parliamentary elections last time I was traveling in the beautiful island of Maldives. I was enjoying the weather and an incredible view on this private island, and I just went to my hotel room, I grabbed my computer, and I just voted. It took me like 2 or 3 minutes only. I didn’t have to miss the elections because I was having a vacation, and I didn’t have to plan my life because of that. I can be whenever I am in the world and still be able to design my future.

Why do you think other countries haven’t adopted the same system?

It was very easy for us to build everything from scratch, as we didn’t have any system here yet when we gained independence.

Speaking about the Western world, it depends on the leadership. We always say that you need to have this very digital-minded leadership. Some countries say: “Okay, but things have been working like this for more than 100 years already. Why should we change?” When they come here and they see how much money we save and how much time we save by having these solutions, then they’re like: “Okay, maybe we should really consider that.” And especially now during the corona crisis, where it has become much more crucial to have online digital services.

What I would suggest to everyone now is to actually start raising the awareness of people. If you have government services online, that does not mean that anyone is stealing your information or that is something bad to have. I can see every single time when the doctor has been accessing my information. I can fully, 24 hours a day, track this information. Would you ever get to know when someone has seen your medical records on paper?

I fully believe that having information stored online, and especially if you can track this, is much safer than having your information on paper. This is why we still try to raise awareness, to make people understand what this is all about, and why this is, I would say, very beneficial and attractive. But at the same time, of course, it might scare people a little and they think this is a lot of work to do. We’re happy to help you if you need any assistance.

Let’s say you saw an alert that a doctor or your bank was accessing health information improperly. What steps would you be able to take as the citizen to correct that?

The good news is that only 5 to 10 cases per year end up with these punishments. But one case that we had was when one of the most famous politicians in Estonia, he was under investigation for corruption, but he was also sick at the hospital. One of the doctors accessed his medical records, and a tiny amount of information there was leaked to the media. The newspapers covered this information and, in the next five minutes, they logged into our e-Health platform and they could see who exactly the doctor was. They started an investigation. This doctor lost his right to work at this hospital.

Obviously, people know clearly we should never be accessing each other’s information just for fun or curiosity, there has to be a valid reason.

Estonia has a novel e-Residency program based on its digital infrastructure. Could you talk more about it?

The e-Residency gives a chance for every single person to apply to become an e-Resident of Estonia without having to make any physical visits to here. You can just apply online. If your background is clean, then we will send the e-Residency card to the nearest Estonian embassy in your country. You have to go to leave your fingerprints, pick up the card, and now you are able to run your business completely remotely. This is how we have attracted a lot of people to especially establish their business physically here, and we will continue to do so.

We established this project just five years ago and, today, we already have more than 70,000 people from all across the world, and there have been more than 10,000 companies also established by this e-Residency solution. If you want to do business with Germany or Slovenia or France or Finland, whoever, then you don’t need to sign any additional agreements because we are European Union and you get access to the European Union market with that.

What is the benefit for Estonia with this kind of program?

Some people pay taxes. We do actually have zero corporate tax level, so if you reinvest the money into the company, then you don’t have to pay any taxes. If you take out the dividends from the company, then you pay taxes here. We have collected now more than €31 million in taxes. Obviously as well, these people use our service providers. If this is a bigger company, then they need an accountant here or they employ some people.

Has the fact that you are so digitally enabled convinced Estonians to stay and not necessarily leave the country?

Talking about myself, I used to live in France. I finished my master’s studies there. The reason why I’m back here in Estonia is not of course the weather. It’s raining often and it’s pretty cold in winter, and I was living in a fancy and warm French city before.

The reason why I came back was 100 percent the ease of life that the Estonian government is able to offer me. When I had to stay for four hours waiting in a queue in some institutions in

France, I wasn’t very pleased because I knew, at the same time, that here in my home country, I could have done that in just 30 seconds online without actually even having to leave anywhere. If you experience life abroad, then you start appreciating this much more. I sometimes feel that people that have never left Estonia don’t really know how to appreciate these things that much. But if you happened to live abroad for a while, then let’s say you’re coming back with a completely different way of thinking.

I know Skype famously started in Estonia. Do you have a sense of how much the digital culture that Estonia has encouraged has led to more technology companies?

We have the biggest number of startups per capita in Europe. We also have the biggest number of unicorns per capita. There are five unicorns here, and that’s a huge number for such a tiny country as Estonia is. We try to use technology in almost every possible sector. The government also has launched a project that they support every company that is using AI solutions here.

If you live in this society where everything is working by technology, then of course also, if you establish a business, then often this provides some ICT solutions, too. When my friends from abroad have been visiting me here, they often say that they feel like when they have arrived to Estonia, it’s like arriving to the future. I really like this saying!

This Sidewalk Talk Q&A has been edited for length and clarity. Follow Sidewalk Labs with our weekly newsletter or subscribe to our podcast, “City of the Future.”

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Vanessa Quirk

Vanessa Quirk

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Editorial Manager, @SidewalkLabs. Former @MetropolisMag @ArchDaily @TowCenter @CharlieRose. NYC. Traveler. Singer. Podcast addict. https://vmquirk.contently.com