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
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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/
Several weeks ago, I had a training about what information management means for the public sector in the Netherlands, like the Dutch government. In this blog I want to discuss the growing importance and impact of information for governments and countries themselves in the digitizing society. An example of a leading country in information based society is Estonia. I will write my next blogpost about Estonia and their strategy on information. In the blog, I will first explain the differences between the two variants of digital goverments: the eGovernment and the ‘brand new’ iGovernment. Then, I will further elaborate on the pros and cons for the two latter types of governments. I will conclude in a forecast of what I expect governments will look like in the future. Before the training, I had actually never heard of a thing such as eGovernment. Off course, I knew that in the Netherlands we use an electronic resident number DigID to arrange stuff online, such as study financing, taxes, et cetera. But, what’s more? Is there a model behind that? I never thought about that.