How did Estonia move from stagnation to being a model of the future? The keys to the success of the Estonian case that astonish the world. How and why it inspires Argentina
Estonia is located in northeastern Europe, between Russia, Latvia and the Baltic Sea. Until 1991 it was part of the Soviet Socialist Bloc, although it is more identified with the Baltic and Nordic countries, especially with Finland with whom it shares roots – cultural, ethnic, linguistic – and close ties of cooperation and influence.
The years under Soviet domination had decimated the Estonian population and its economy. Impoverished and depressed, she had to redefine her identity and direction in the world. That’s when he decided to bet on technology, looking in the mirror of Finland, a country that had achieved an economic leap thanks to the creation of a company that led the cell phone industry for several years: Nokia; and whose success fostered the emergence of new businesses.
With a cabinet of young people – average age of 35 years – and Toomas-Hendrik Ilves, a technology-loving president, they begin to imagine the Estonia of the future and put together a plan that would make it possible. They bet on a combo of a fixed income tax, free trade, solid currency and privatization. New companies can register easily and without delay.
There was almost nothing, everything was to be done, including infrastructure. Finland offers its analog telephone connection from the 70s for free, but Estonia rejects it and decides to upgrade with digital telephone connections and build its own cutting-edge system. Thus, it goes from having 50% of the population without a telephone to having 123 cell phone lines for every 100 inhabitants.
In 2004, together with other Eastern European countries, he joins the European Union as a new member, at the same time he becomes part of NATO and finishes fixing his position on the world board. Russia can no longer consider it part of its backyard. After its independence, the frictions with its neighboring power do not stop happening, with some periodicity and different tenor.
Estonia has managed to open a place in the world, and today is an emblematic case for the consistent transformation that makes it an example in Europe and in the world.
It does not mean that life there is rosy. With only 1.3 million inhabitants, it is one of the least populated countries in the EU.
Its capital, Tallin is a windy and cold city, with an average annual temperature of between 4 and 6.5 degrees. The city landscape still betrays the times of the iron curtain. The language does not help either: with Estonian as the official language, most foreigners find there a barrier impossible to cross although they have lived in that country for years. On the other hand, geopolitical instability and risk have discouraged many investments, an aspect that has always worried the government.
The size of the country is also a hindrance when it comes to growing companies that need qualified human resources, such as technologies. This leads the authorities to start offering the first virtual residence in the world with the goal of reaching 10 million “inhabitants” by 2025.
However, Estonia is at the forefront of Europe in Internet penetration and mobile telephony. The sector of information and communication technologies (ICT) have become a very important part of the country’s GDP.
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Today, life expectancy is 72 years, 99.8% of the population is literate and 97% of banking operations are done online.
How does Estonia become a digital society that has improved the economy and the quality of life of its inhabitants?
- First: education
The first action that is taken from the state to initiate this transformation was the “Tiigrihüpe” program to teach computers in schools. Laboratories are created with computers connected to the Internet in the country’s establishments. To reach the rest of the population, outside school hours, schools open their doors to the community so they can make contact with technology and learn computer skills.
Towards the end of the 90s all Estonian schools are online
Between 2002 and 2004, various computer courses for adults were offered, such as “One Look at the World” (Vaata maailma) funded 100% by the private sector, which manages to introduce 10% of the adult population to the digital world.
This same foundation, in 2003, incorporates the virtual space that connects the classrooms with the homes it calls “E-kool” (E-school). The system allows a real-time communication with parents and gives them the possibility of accessing from their computers to the content of classrooms, absences, notes, homework and exam dates for their children. At the same time, it opens an instance of participation to the opinion and contribution of the parents
Programming is an essential part of the curriculum. From first grade, teachers teach children to program, an activity in which they start even from kindergarten.
Today, for any Estonian, interacting with technology and solving daily issues, more efficiently thanks to it, is a common aspect of everyday life. At the same time, many young people have been able to start or enter the labor market thanks to the use of these tools.
- Digital Identification
Unlike other countries that also have a digital identification, in Estonia it is not optional but mandatory and universal. A key decision to implement this system successfully.
This unique digital identification of 11 digits, is given to each citizen at birth and is the one that will accompany him throughout his life, in each instance of his citizen participation: from voting – in 2005 the digital vote is incorporated and today the 30% of the population votes from their home or from their cell phone -, declare taxes, register a new business or access the systems of e-schools, e-police, e-cabinet or e-health.
In total there are more than 4 thousand digital services that can be accessed thanks to this identification.
Foreigners can also apply to obtain a virtual citizenship, since Estonia offers these digital identifications to all those people who want to invest in the country. From anywhere in the world, the new e-resident can register a company, take out a bank account, implement different online solutions such as PayPal and manage the entire company remotely.
With a population that decreases every year, the real goal of Estonia with this proposal is to include the number of e-residents needed to reduce or even eliminate the payment of taxes to its citizens
3.Internet as “human right”
Estonia has always played strong in this transformation, without half measures. In that sense, it was the first nation to declare the Internet connection as a “basic human right”. A move with a clear strategy: to force the private and public sector to provide the Internet service to the entire territory – regardless of whether the cost equation makes it convenient or not – and without excuses.
- With the focus on entrepreneurs
One of the great Estonian pride is to have generated the software that allowed the creation of the revolutionary communication platform, Skype. When Microsoft buys it for USD 8,500 million, these funds are diversified into new startups that are accompanied by foreign investments that begin to trust the creations of that country.
Today, Estonia is the country with the highest number of StarUps per capita in the world. Among them: Transferwise, Pipedrive, Cloutex, Starship, the delivery robot created by the founders of Skype is part of the usual landscape of Estonia
Unlike what happens in the US and China, where the entrepreneurial spirit is part of the culture of the country, in Europe (especially in the East) young people look at the world of work from the perspective of “employees” and not owners or entrepreneurs To change this mentality, very interesting instances were generated that gained the attention of the rest of the EU as “The people of the company” that started in Tartu, a city in the east of the country. There, and through play, children and adolescents between 5 and 18 years practice what it means to be entrepreneurs, as a way to encourage them to undertake.
- Public management as a service to the citizen
The one in Estonia is the first e-government in the world. Since independence, they decide to innovate in digital matters within their own meetings: they stop using paper and incorporate a system of databases connected to the Internet. This also makes it possible to see all the expenses of the state online and in real time.
The calculation is that each Estonian saves two weeks a year of his time thanks to not having to move or stand in line.
Even the annual tax return can be done with a Smartphone thanks to the system has pre-loaded all the data of each citizen (income, property, expenses, number of children, etc.)
Public management in a true service to the citizen. The maximum example is the Tax Agency that returns information to the citizen with online and real-time reports on the progress of its business and financial situation. So are online medical records and the
electronic prescription of recipes by mail.
- First of all, security
Estonia is the number one European country in cybersecurity,
Everything is protected by a Bockchain system, a decentralized network that is very difficult to hack. It also has several back-ups, including the first embassy of data, based in Luxembourg.
A decentralized architecture for computer communications, called X-road, prevents massive theft of data. In addition, Estonians use two-step verification methods for most of their activities. In this way, criminals at most can block access to certain services or drop some websites momentarily.
The great lesson about the importance of security is suffered in 2007 when Russia cyber attacks its system in retaliation for the decision of the Estonian authorities to take a monument dedicated to the Soviet Red Army from Tallinn and move it out of the capital. The cyberattack perpetrated by another state – not be able to criminals – and under political motives – non-economic – marks a milestone in the history of what is known as cyberwar.
- A lot of freedom and maximum transparency
According to Freedom House, Estonia is the country with the greatest freedom of the Internet. What shows that you can have a free and open Internet and at the same time demand the highest possible security standards.
But in addition, Estonia is the most transparent and least corrupt country in the Central and Eastern Europe region (Transparency International Corruption Perception Index 2013, the 28th of 177 countries).
Estonia’s economic freedom is considered to be one of the highest in the world and the best in the Central and Eastern European region (World Classification of Economic Freedom, 11th among 178 countries). It is not a matter of chance that the Center for Excellence in Cyber Cooperation of NATO and the IT agency of the European Union are located in Tallinn.
The Estonian government has an electronic declaration of officials’ assets to reduce the risk of corruption and increase transparency.
Every year, active citizens from all over the country organize community activities on the day “Let’s do it!”. A program that emerged in Estonia in 2008 when 50,000 volunteers mobilized to clean up the country in 5 hours, removing 10,000 tons of garbage and saving the state the work of 3 years and 22 million euros. At present, it is a global network covering 112 countries, and having mobilized some 14.5 million participants. Let’s do it! It has initiated a change of mentality that extends throughout the world.
All this has led to the Estonians have cultivated, in the world, an image of people with an average level of high education, honest, hardworking and who keep their promises.
Some achievements of Estonia:
99.8% of the population is literate
Country with the highest number of StarUps per capita in the World
It has the fastest wide bank in the world
It is the only one with i-voting that allows you to pay from a cell phone
First nation to declare the internet connection as a “basic human right”.
All your schools are online
Kicks off to schedule kindergarten
It has compulsory and universal digital identification.
At the head of Europe in Internet penetration and mobile telephony.
First virtual residence of the world
123 cell phone lines for every 100 enablers.
It is the first e-government
European country number one in cybersecurity,
Country with the greatest freedom on the Internet
Allows you to register a company in 18 minutes
Almost all the procedures can be done online
In local key
Infobae consulted with three officials of key portfolios in the modernization, digitalization and promotion of technology and innovation in our country. All of them also serve the Estonian model as a case of success and a source of inspiration.
This past week, Mariano Mayer visited Estonia to receive an award for entrepreneur promotion policies. Today, from Finland, he tells Infobae that “what we find very interesting is that Estonia understood that, being a very small country, it needed to achieve a rapid growth that would allow them to recover lost time, which is why they focused entrepreneurs and in the knowledge economy. “
They set out to be one of the best countries in the world to undertake, develop technology and be at the forefront of digitalization. Local entrepreneurs, and around the world, have many facilities, one of the best tax agencies in the world and an excellent system of digital residence. It has the world record for the incorporation of companies: 18 minutes.
What do we talk about until now?
- As points of convergence: both countries seek to analyze in which aspects the State adds value and in which it does not, always with the entrepreneurs as protagonists.
- We tell you about the Simplified Shares Company (SAS), which is part of the Entrepreneurs Act and that is working very well.
- We talk about digital identity projects that we are working with the Ministry of Modernization, exchange experiences and explore possible collaborations in entrepreneurship, digitalization of SMEs, and knowledge economy.
- We analyze to start connecting our ICT clusters with yours and see what things could be done, what best practices can be developed to simplify the procedures for SMEs and entrepreneurs.
- Urve Palo, the Minister of Entrepreneurship and Information Technology of Estonia, will come to Argentina in December in the framework of the WTO meeting and we will meet again to advance joint work projects.
With firsthand knowledge of the Estonian case, for the Minister of Modernization of the Nation, Andrés Ibarra, “if the procedures are simplified, allowing them to be done over the Internet and at a distance, the producers export more in less time, the companies are created with faster and the projects of each Argentine become a reality faster, the objective is to leave behind a slow and bureaucratic state “.
Andy Freire devoted a complete chapter to the case of Estonia in his book “Entrepreneurial Argentina: How to innovate can produce real and decisive changes in the destiny of a country”.
In consultation about whether he was inspired by the Estonian model during his tenure, he pointed out that from the ministry he presided, they worked together with CABA’s Education in launching the “elbow to elbow” program with the objective of “teaching programming to any neighbor with a title secondary education as a way to provide the necessary tools to enter the new working world.
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