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The Digital Republic

June, 2020

While most of the globe is struggling to adapt to the new virtual normal, life for one Baltic nation has not been disrupted on this front. With 99% of government services available through online means, the country has had a seamless shift in the current scenario. No, I am not talking about possible future scenarios. This is present day Estonia – a tiny Northern European country which is perhaps the world’s most digitally advanced society. Meanwhile, other countries, even the developed West ones, are going through a chaotic fun-house like attempt at digital innovation, running through false walls every once in a while.

Welcome to the Digital Republic (it might seem like Narnia to you).

The post-Soviet nation houses just under 1.3 million people and offers 99% of government services through electronic modes. If you live in Estonia, you are required to be physically present only on 3 occasions: (1) marriage, (2) divorce and, (3) real estate transactions. Electronic voting in the Baltic country has also taken the world by a storm. Since 2005, Estonians have been able to cast their vote online sitting in any part of the world. In their recent 2019 parliamentary elections close to 44% of votes were cast online. Moreover, voters are allowed to change their votes during the stipulated duration too (a woman changed her vote over 600 times!). Government services are not just available online but are also hyperconnected. Data from every department is integrated onto one system. Prescriptions are entered into an e-prescription system, you just need to go to a pharmacy and present your ID. This ID I am talking about is a defining aspect of e-Estonia. It grants access to voting, tax, signing documents, public transport and 600 other services. The State on its quest to truly become a digital country without the restrictions of physical borders, also launched an e-residency programme in late 2014. It was the first State to do so. Today, are more than 50,000 e-residents and 8% of registered companies belong to this group. As an e-resident, you can establish and manage a company in Estonia from anywhere in the world, have a bank account, digitally sign and transfer documents and declare Estonian taxes online. Municipalities are practically paperless by now. There are also provisions for e-learning, e-healthcare and an ‘e’ version of almost everything under the sun. Didn't I say it might seem like Narnia?

The obvious question that comes to mind here is how did a post-soviet nation of just 1.3 million get to this point?

Estonia with its meagre population, lack of natural resources and 50 years of imperial occupation by the USSR wouldn’t be your first guess for a digital superpower. Well, let me remind you, Skype was built in Tartu (the second largest city in Estonia). One of the major rules is that no software used by the government should be more than 13 years old. Even if it is in mint condition. This ensures obsolesce is avoided. Meanwhile, other countries often keep funneling money into upgrading old technology. The government here has also invested in building a technically skilled nation. The Estonian IT Academy was launched in 2012 to further this movement.

The pillar ,however, underpinning e-Estonia and all of the initiatives under this umbrella is the IT system architecture - a platform called X-Road. And, here is where I believe the true beauty of the system lies. So much so that it has been implemented in Finland, Azerbaijan, Namibia and Faroe Islands. X-Road is what allowed the country to transform to a digital one. It is a technological environment allowing secure data exchange between information systems. For example, a driver in Estonia doesn’t have to carry his or her driver’s license because of X-Road. The police officer can make an inquiry through X-Road to check if the person has a valid license. The driver however does need to have his or her personal identification document. The open source code is also built on a distributed architecture and is an interoperable ecosystem. Simply put, it is a decentralized model. There is no single point of failure, even if one node gets knocked over, the others operate without any fallout from the node in question. This system ensured that government services was not crippled during the Russian cyber-attacks of 2007 on Estonia. In fact, there are also servers in Luxembourg holding a complete set of records of e-Estonia, in case the country undergoes an invasion or rather, an e-invasion tomorrow. Finland and Estonia have initiated automatically enabled data exchange capabilities since 2017 and now the nations systems are compatible and they exchange information on health, tax, demographics, etc.

A major concern that arises here is that of privacy concerns. How do you avoid a big brother like situation or an Orwellian state? The X-Road system although hyper connected and integrated, is completely transparent. All interactions are logged and accounted for and citizens can access who has looked at their data.

Estonia in a nutshell is a disruptive nation state on its path to reimagining how governments and societies should operate. This is more so relevant in the context of the ongoing coronavirus pandemic. In the United States for example, due to a lack of infrastructure for working remotely, the Capitol Hill has been compelled to get back to work physically. Something similar needs to be built across the world. A system that allow States to govern from a distance. This is particularly important for pandemic hit countries entering elections. It took Estonia over 20 years to get to this point. And, this was with the limited resources the tiny country had at hand. The size of the state can be looked at as an obstacle or an advantage. Yes, it would be exponentially more difficult to build a digital society in a country of the size of the United States or the United Kingdom but, the resources they possess should also be kept in mind. Estonia, with annual expenditure of just $13 billion has managed to redefine the meaning of a nation state. Imagine what can be done with $4.45 trillion (the expenditure of the United States in 2019)!

  • Written By Suviti Singh

Suviti is an intern at the firm since 2020. Suviti handles the world seeing the happy face (of TSB, of course). She knows where she's going, it just might take her 2 hours longer than expected.