Estonia, a small country with only 1,3 billion inhabitants, located just underneath the Baltic Sea. There, accompanied by Finland, Lithuania and Russia, it disruptively rises as a leading country in information management. You probably did not expect e-Estonia to be so disruptive, and you probably do not even know more about Estonia than their annual Eurovision Song Contest participants. Therefore, I will give you a little introduction.
In 1991, the country got independent from Russia. During that time, only half of the inhabitants got a phone line. In 1997, 97% of the schools were online. Three years after, the cabinet meeting in Estonia went paperless. Half a decade after that, e-voting was introduced. In 2012 the country was almost fully covered on fiber network. Also, 94% of the country’s tax returns were being made online. This made is possible for citizens to specify in their tax in an average time of only 5 minutes, since most parts were already filled in completely by the link between the tax office and the local banks.
In the end of 2014, Estonia introduced the concept of e-Residency as the first country in the world. As of beginning of May the next year, more than 10K people (from over 127 countries like Finland, Russia, and the Netherlands) had applied for e-residency. Today, every task of the government that can be done digitally, is being done digitally (http://www.zdnet.com/article/post-panama-papers-heres-how-estonias-e-residency-project-plans-to-head-off-banking-scandals/, 2016).
So, what is e-residency? “e-Residency offers to every world citizen a government-issued digital identity and the opportunity to run a trusted company online, unleashing the world’s entrepreneurial potential.“ (https://e-estonia.com/e-residents/about/, 2016). This means, that you do not have to live in Estonia to be an Estonian e-resident. In fact, the e-residency is a transnational digital identity available to anyone in the world interested in administering a location-independent business online. So, if you want to do business through Estonia, this can be done by becoming an e-resident. For example, because the Estonian tax is favorable (for other advantages check https://www.leapin.eu/articles/e-residency). If you become an e-resident, you get a digital ID card that contains a special chip. Using this card, you can enter Estonian public and private sector services and resources.
Since this blog is here for academic reasons, I would like to elaborate on a comparison introduced by Fletcher in the Digital Evolution Index (http://fletcher.tufts.edu/eBiz/Index, 2013). Due to the introduction of the e-Residency, Estonia is now ‘competing’ with other countries with its digital infrastructure. Fletcher has made 4 categories of states that countries are in (Figure 1). On the vertical axis, the status of the countries’ digital ecosystems are displayed. On the horizontal axis, the five-year rate of change of each country, positive or negative. The zones that are displayed are called evolution zones. Where do you think your country is placed? And where do think Estonia is placed?
Figure 1
I would like to put the focus on the Stand Out division, since these markets or countries offer a disproportionately high ROI in e-commerce. Policy and regulatory environments that promote rather than restrict the digital economy are a competitive advantage: Chile, Malaysia, and Estonia are reaping the benefits of their forward-looking governments. However, a lack of effective institutions can deadlock the growth potential of e-commerce in some of the biggest emerging economies, including China, India, and Brazil. Therefore, the e-residency in Estonia creates growth potential for the e-commerce market, on a disruptive way.
In the figure below countries are placed in the Trajectory Chart, based on DEI data (2013). Estonia is on the Stand Out division of the graph, which is a nice sign for their economy.
Figure 2
Surprisingly (at least in my opinion) we see the Netherlands standing all alone in the Stall Out division. This means that the Dutch did well in the past, but now, they are going to lay behind. For Dutch residents and entrepreneurs, businesses, it would be beneficial that the Dutch policymakers take this seriously and make sure not to get too comfortable in this Stall Out division of the Trajectory Chart. As of this year, the Netherlands have agreed upon a project to improve their ICT. One of the companies consulting that, is the company that I work for (PBLQ). This is by the way also my source of inspiration for this blog post.
Thanks for reading,
Ruth de Vogel
388497
Nice links for more information:
http://www.zdnet.com/article/post-panama-papers-heres-how-estonias-e-residency-project-plans-to-head-off-banking-scandals/
https://e-estonia.com/e-residents/about/
Dear Ruth, thank you for your post! I think Estonia on the graph is located in the top right (Stand out), and I am guessing the Netherlands is bottom right (Break out). This was what I thought before checking the graph, when it actually showed the Netherlands on stall out, and Estonia indeed on stand out, but closer to the middle. Thus, I was just a surprised as you were to see the Netherlands in the stall out section. I agree that the Netherlands has to catch up – I recently saw a paper in the Jumbo Supermarket, at the info bali, that a paper driving license will not be counted as valid anymore. While the paper license has not been given out anymore since 2006, apparently some people still use it! I also read somewhere that the Netherlands wants to give citizens access to their medical history online, and wants to start using an electronic driver license in the future. Hence, I think these developments will help the Netherlands to get to the Break out or Stand out section. I think it is crucial for the Netherlands to keep up, otherwise they might indeed fall behind.
It is pretty nice to see some European countries like Estonia making forward initiatives regarding digital transformation. I was surprised however to discover that the Netherlands were not expected to digitally evolve anymore, and even more surprised that Belgium (which is where I come from) was rated higher than the Netherlands. Working for Blazeclan, a Cloud & Big Data enablement company, I was able to experience how Belgian executives were quite slow at adopting the Cloud and all of its benefits. Having attended some Cloud related events in the Netherlands, such as the AWS summit, it was interesting to see how Dutch executives were much more informed about the newest technologies and ready to adopt them. However, this is only my own biased human experience, and I have only been exposed to how business adopt the Cloud, which is only a part of the digital evolution you present. It would be nice to see some more recent data on this quadrant though, to see how things might have evolved over the past 3 years.