Something exciting is happening in the small European country of Estonia — so exciting that its then-prime minister made an appearance on “The Daily Show With Trevor Noah” last year. Although Taavi Rõivas, 37, no longer serves as prime minister (his Reform Party lost its majority in the Estonian Parliament in November 2016), he remains a proud global spokesman for that excitement — the digital society of the country and the start-up energy of its capital and largest city, Tallinn. “Estonia is probably the only country in the world where 99 percent of the public services are available online 24 hours a day, seven days a week,” Rõivas says. And companies like Skype — founded in 2003 in Tallinn before being purchased by Microsoft for $8.5 billion in 2011 — have paved the way for hundreds of new start-ups. “There’s something cool and innovative boiling up all the time,” Rõivas says.
A Solid Digital Infrastructure
Estonia’s digital society extends to everyone living there: A digital ID issued by the state provides easy access records and services (think healthcare, employment and education) and allows for digital signatures. It’s a huge time saver. “People in Estonia can focus on their lives instead of communicating with the state, and businesses in Estonia can focus on running the business instead of administrating the business,” says Kaidi Ruusalepp, founder and CEO of start-up funding engine Funderbeam. A big secret to this digital success: The services aren’t individually digitalized — their systems are all connected together. The integrated digitalization saves money, too. Estonia saves 2 percent of GDP by signing documents digitally alone. Part of that savings is realized through reducing physical paperwork — the equivalent of the Eiffel Tower’s height in paper every year, Rõivas says.
That digital mindset extends from public to private, especially in Tallinn. Free Wi-Fi throughout the city — rolled out 15 years ago — provides a strong foundation for everything from self-driving buses to delivery robots to start-ups that can conduct business from a park bench. “Citizens in Tallinn can get on and swipe their bus card, buy tickets for a show and pay their rent, all from their smartphone,” says Crystal LaGrone, an American working in Estonia as a sales consultant for Sharemind, a start-up that focuses on big-data analysis. “As an American, I think these solutions are amazing. But for Estonians, it’s the way things are done.”
Most Estonians are proud to tout the benefits of digital living — and to encourage people in other countries to follow suit. One of the most tangible ways to grasp the idea, though, isn’t digital at all — it’s through a physical showroom. “People can read about it, but this is a way to have a face-to-face interaction and see the actual solutions in action,” says Indrek Õnnik, manager of the e-Estonia Showroom in Tallinn, who uses his own digital ID to demonstrate how to access services. In the last year, he and his team have hosted leaders including German Chancellor Angela Merkel and Australian Minister for Foreign Affairs Julie Bishop, as well as media outlets such as The Wall Street Journal and the BBC. “We don’t only talk about what and how Estonia had done these things,” Õnnik says. “We show why we did these things. We try to show people the benefits and the links to society.” And although it’s hard to beat the showroom, he says, his team is working on a virtual reality experience, too.
Connecting Across Borders
Estonia isn’t just about exchanging ideas. It’s about literally connecting. Take, for example, its digital connection with Finland, its neighbor to the north. “We are the first two countries to have cross-border services and information exchange between various state registries,” Rõivas says. “This is in the rolling-out phase, but we are already exchanging tax information and resident information.”
But these connections aren’t happening only between governments. Individuals can cross borders digitally, as well. Estonia is the first country in the world to offer a program called “e-Residency” to anyone in the world. The program makes it easy to access public and private entities in Estonia — banking, business contracts, government services and the like using an ID card with a microchip — all without even stepping foot in the country. “It offers the freedom to easily start and run a global business in a trusted EU environment,” Rõivas says. More than 22,000 e-residents from 138 countries have signed up since the program launched in 2014.
In late August, Estonia announced its interest in issuing its own state-backed cryptocurrency (digital currency) called “estcoin.” If all goes according to plan, estcoin would be launched through an initial coin offering (ICO) — a form of crowdsourcing designed for the digital coin community.
Go Inside Two Tallinn Start-ups
Want to learn more about other connected cities? Check out A Day in the Life of a Connected City.
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