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Learning from Estonia: How a young nation became a leader in digital living.

Over the past few years, as more countries are planning for their future digital societies, Estonia has stood out from the crowd - even been called "E-estonia" by many. Stellar Capacity has included implementations from Estonia's digital society as case studies in our programs, and will share the reasons to why this small nation punches way above their expected bandwidth here.

We might be tempted to claim that most of us are living in digital societies today, with people using the same apps and services on different sides of the globe. But Estonia has always been different. The country has taken its vision of a digital society seriously from the beginning, making digital changes that are often inseparable from their wider values.

Estonians have envisioned a wider digital transformation since the early days of their independence in 1991. Already by 1995, Estonian ambassador to the United States (and future president of Estonia) Toomas Henrik Ilves had conceived of a strategy to radically digitalise the country and solve many emerging challenges. He reasoned that Estonia, whose GDP per capita was 13 times lower than that of neighbouring Finland, needed to make the kind of changes that would strengthen its own economy, all while establishing public trust for the nation's new institutions. The best way to ensure this, he believed, was for his country to have digital ambitions of its own.

This vision would develop into a landmark project known as Tiigrihüpe (The Tiger Leap), which was funded and implemented in 1997. The project set out clear initiatives to guide children to achieve IT literacy, by radically expanding network and computer infrastructure. The state anticipated many educational benefits in providing widespread access to the internet and boldly acted upon it.

The results were almost immediate. Within a year of its conception, 97% of Estonian schools had access to the internet. And by 2000, Estonia broke new ground by passing legislation that declared access to the internet as a fundamental human right.

Within the first decade of its independence, therefore, Estonia had already outlined its route to a digital future based on collective values. The Tiigrihüpe is seen by many Estonians as a pivotal moment in their modern history, and a large part of its significance is tied to the vision of a digital society contained within it. But as well as being groundbreaking for the newly independent nation, it also set a global precedent, To place the initiative in perspective, at the same time that the project was launched, only 1.7% of the world had access to the internet. The country was already far ahead than most in this regard.

Becoming a world-leader in digitalisation wasn’t simply a matter of establishing their own Silicon Valley, but was far more about considering how technology could be used in a way that benefited society as a whole. The Tiigrihüpe was, first and foremost, an initiative to grant children access to education. For a country with limited resources, it created an infrastructure that secured a generation’s familiarity within a new kind of industry.

Could digitalisation then hold the key to uniting the young country as it entered a new age?

Securing a digital society for the future.

Present-day Estonia suggests a great deal of success in this regard.

Take, for example, the country’s use of digital policy to boost global interconnectivity. Estonia’s e-residency scheme has attracted many headlines worldwide - being the first of its kind. Launched in 2014 by the government, it suddenly became possible for non-Estonians to receive their own digital identity and special status within the country. “E-residents” are able to access key Estonian services from afar, including banking and company formation, which acts for many as a gateway into the European market. By now, there are at least 85,000 e-residents (including Angela Merkel), with many managing their businesses from different locations all over the world. By inviting non-Estonians to experience their robust digital infrastructure, the scheme has placed Estonia at the center of discussions about digital living. And by encouraging new businesses to set up within the country, the scheme has undoubtedly contributed to its renown as the country with the highest rate of startups per capita in Europe.

But there are more fundamental decisions that have impacted upon day-to-day life within the country. For the past twenty years, all Estonians have been provided with their own “E-identity”, giving them access to the majority of public and private services. This already sets Estonia apart from many other countries, but what's truly transformed Estonia into a fully functioning digital society is the innovate way that the concept has been implemented. By ensuring that the country's digital infrastructure provides interoperability services (for example, through X-road software), data connected to e-identities only needs to be requested from individuals once. Different organisations and information systems are connected through the same software solution, and this allows Estonians to sign contracts, fill in their tax forms, access their medical records, and pay bills with ease. Making use of their digital signature is the smart solution for Estonians, and it saves them up to five days per year in time.

This interoperable backbone to the country's digital infrastructure has been largely responsible for the sheer breadth of services that are now available digitally. As personal data rarely needs to be requested, signing up to new services requires little to no bureaucracy. Even democracy has been digitalised - no less than 46% of voters in the 2019 European Parliamentary Elections registered their votes online. You might also hear a comment or two about death itself being digitalised, as Estonians refer to the cemetery portal Haudi, which allows users to search for the various locations of the deceased. In any case, the sheer variety of services that are now available digitally is a testament to the success of Estonia's interconnected digital infrastructure.

Imagining an Estonia of tomorrow.

It’s certainly fascinating to see how a digital society has already been realised within Estonia, but it’s just as intriguing to catch glimpses of its future direction, as the country experiments with its existing infrastructure in exciting ways.

Consider, for example, how data exchange has been streamlined in the ‘smart city’ of Tartu through the implementation of an ARCgis data management system, which allows for the open transfer of machine-readable data between different private and public bodies. In the case of Tartu, through allowing for an easy transfer of information between the local university and city government, cooperation has been significantly boosted. As a result, Tartu has formed a number of innovative solutions to a wide range of issues, implemented at an impressive rate, with very little bureaucracy involved. These include 60 new biogas buses to the city, 300 new 'smart' LED street lights with sensors, a public bike sharing system with 65 stations, and an entirely new district cooling system that provides a much higher efficiency. If the rapid investments made in a digitalised Tartu are any indicators for the future, then there's still much to be excited about about in other cities of Estonia over the coming years.

It’s also important not to understate digitalisation’s impact on sustainable development, or its future potential. According to some estimates, the country has saved on stacks of paper as high as the Eiffel Tower annually as a result of its digital transition. With sustainable solutions becoming ever more in demand, Estonia might be able to provide guidance for many.

A state without a Big Brother.

These successes might make it seem as if it were easy for Estonians to create a fully functioning digital society, but this would be far from the case. Indeed, the country has faced significant challenges along the way.

One of the most obvious examples of this relates to the cyber attacks aimed at Estonia in 2007, in which waves of misinformation spread to cause chaos in the streets of Tallinn, and banks and government bodies experienced external pressures that brought their systems to a halt.

The attacks painted a clear picture of the deficiencies within the country’s digital infrastructure and security. Even more worryingly, by drawing attention to new vulnerabilities of a digital society, the attacks imperilled the very foundations of Estonia’s collective vision. Did the country need to take a step back and reconsider its digital future? The threat that emerged in 2007 was more than fleeting - it was almost existential for the young nation.

The issues weren’t solved overnight, but the country has demonstrated an impressive adaptability since then. In 2012, Estonia became the first country to implement blockchain technology within its digital infrastructure, ensuring that sensitive data retains its integrity by becoming increasingly decentralised. And due to the fact that this data never leaves the blockchain system, it's much easier for threats to be mitigated, and for any potential attacks to be detected at a much faster rate.

In the case of a successful cyber attack against the entire country, the government has recently established a ‘data embassy’ in Luxembourg, to store much of its sensitive data. This would theoretically allow for the government to operate from afar, even in times of occupation. In her recent presentation at the Stellar Executive Program, E-estonia's Digital Transformation Advisor, Anett Numa, explained that this decision was motivated by the country's relative security compared to many other locations. Luxembourg isn't known for making enemies, and its centrality within the European Union make it an ideal base of operations in the case of occupation. As with the implementation of blockchain technology, the use and purpose of the data embassy in Luxembourg demonstrates how new decisions about digitalisation in Estonia are never made on a whim - they follow a great deal of premeditation and scrutiny, and are always considered in combination with the country's interest for security.

Governmental transparency has also certainly helped to settle many anxieties since 2007. The country ranks highly in public trust for its government, and this has likely been boosted by the way that leaders have encouraged open discussion about the challenges of the digitalising process. It also helps that governmental agencies consistently honour data privacy among Estonian citizens. The state doesn’t act as an intrusive ‘Big Brother’ authority in the country. Written into law through the Personal Data Protection Act, citizens have complete ownership over their own personal data. Governmental agencies can only access this data on the basis of consent, and the process has to be conducted with absolute transparency. In stark contrast to the murkier aspects of Facebook and Google, data processing by the Estonian state has clearly defined limitations. Data can only be collected to the necessary extent of fulfilling a specified purpose, and only upon request. Individuals will always be notified if their data is collected, and the process will be on record in full detail in case it's necessary to contest missing or inaccurate information. Considering all the metrics - it's clear that the Estonian government's role in collecting data is far less intrusive than many social media platforms today. In fact, it makes great effort to be as non-intrusive as possible.

Estonia has also massively ramped up its cyber defense training since the attacks. There have been substantial investments made in education for teenagers to learn the fundamentals of hacking and cybersecurity, and separately, the Cyber Unit within the Estonian Defence League has been set up as a branch of national defence tasked with protecting the country's cyberspace. There's a clear incentive to offer mass training in cybersecurity in Estonia, and this makes it more well-positioned than most to deal with future threats in the digital sphere.

The attacks in 2007 were certainly a dark chapter in Estonia's history, but the resulting concerted efforts made by the country have ensured that it now has one of the most secure digital infrastructures in the world.

What lessons can we learn from Estonia?

We often over-emphasise the binary between technology and humanity, but Estonia demonstrates that it’s perfectly possible to create a digital society without losing sight of deeper, human values.

This was made clear by Marten Kaevats, Estonia’s National Digital Advisor, in an informative interview made within the New Yorker. “This enthusiasm and optimism around technology is like a value of its own,” he says. “This gadgetry that I’ve been ranting about? This is not important. It’s about the mind-set. It’s about the culture. It’s about the human relations—what it enables us to do.”

Estonia’s digital society is closely bound to the dreams and aspirations of a country that only recently gained its independence. As such, digitalisation is most often considered in relation to the needs of its people. Innovative digital solutions within the country always have a deeper social purpose - whether it’s by creating a dynamic culture or by providing new educational opportunities for a younger generation. As Estonia is increasingly proving to the world, their digital strategy has only strengthened their independence and resolve as they continue to boldly innovate.


Learn more about cutting-edge cases from across the World in the Stellar Executive Program, and discover what’s needed to become a successful digital leader. The next program start in April 2022.


Contact us if you would like to know more about our programs and one of our program advisors will get in touch!

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