Create transformative innovation

Virtually connected citizens: Meet Estonia’s e-residents

  • Estonia is pioneering digital service delivery with its e-citizenship and country-as-a-service schemes
  • The opportunity for governments lies in interpreting complex data sets to predict social and economic outcomes
  • About a quarter of the global workforce can work from anywhere, opening up huge potential to governments that embrace virtual movement 

The future of citizenship and service delivery is here – and it’s all about virtual movement, says former Estonian government CIO Taavi Kotka.

Northern Europe’s Estonia, on the Baltic Sea, is a unique and exceptional example of digital transformation in service delivery for leaders and governments the world over.

Faced with dual the challenge of a small, physically dispersed population and slow growth, embracing technology and connectivity is at the core of this new virtual movement, says former Estonian government chief information officer Taavi Kotka.

IN:SIGHT sat down with Kotka to discuss how his country delivers digital services, the notion of country as a service, and how e-residency and big data are transforming the relationship between government, business and citizens.

IN:SIGHT: Estonia has gone through a massive digital transformation over the past two decades. What does that transformation look like, and what does it mean for people and business?

Taavi Kotka: Estonia is a small country with only 1.3 million people, but we have a huge land-mass, bigger than Switzerland or the Netherlands. That means it’s hard to serve citizens physically, and so we have digital service delivery. It was initially led by the private sector, then the government followed. Now the government has passed the private sector and leads in innovation.

IN:SIGHT: How is the government fostering conditions for innovation?

Taavi Kotka: Although the private sector is usually faster, in small markets there’s a limit for private sector reach. It gets to a point where the private sector can’t invest anymore because there aren’t enough customers. Government is different. It has the entire country as a customer base and doesn’t have to compete with anybody.

Think about this: there are 3.6 billion jobs in the world. Around a quarter of these employees can work from anywhere, so that is a $US20 trillion market. And in terms of the money these people control, that’s a conservative estimate. Do you want to get your share or do you not?

“Governments have to get competitive about attracting those people who can provide a service from wherever they happen to be or want to be. It’s all about virtual movement.”

Taavi Kotka, former chief information officer, Estonian government

IN:SIGHT: Estonia has an e-citizen program. What is it, and how did it come about?

Taavi Kotka: If you want more revenue, you have to get more people to connect with you. Because 99.5 per cent of our transactions are digital, we can serve our diaspora, and it becomes apparent that we can service other people too. Governments have to get competitive about attracting those people who can provide a service from wherever they happen to be or want to be. It’s all about virtual movement.

For example, if you are setting up a company in Europe, we provide a location-independent, hassle-free digital environment to do that. What this means is that if an Australian wants to run a company in an EU location, they can become an Estonian e-citizen and run it from Australia using a computer.

IN:SIGHT: What is the relationship between big data and service delivery, and how is the Estonian government leveraging this potential?

Taavi Kotka: There are two layers to this. First there are the connected systems which bring together all the data and information. This is the simple level, and the amount of information you can get from a big data perspective is huge.

The challenge is in the second layer, in having access to the skills to interpret the data and apply it to future data models. For example, looking at big data, we can say we might lose 3000 jobs in Estonia in the chemical industry during the next six months. And having this we can instantly calculate what the social and economic impacts will be to look at things like impact on housing and families, calculate government support required, and consider alternatives and outcomes before we get there.

IN:SIGHT: Given that it’s still early days, what is the potential of the e-citizenship scheme?

Taavi Kotka: The vision is that people will start buying services [from the Estonian government] the same way they do any other service, meaning governments don’t have a monopoly anymore. It’s like a university education today. Organisations like MIT [Massachusetts Institute of Technology] run online courses and now you can get a degree from MIT without ever going to the United States or stepping onto an MIT campus. This is the idea of country and government as a service. 

Estonia will continue to innovate because that is the only option – with 1.3 million people you don’t have any choice but to innovate. We were the first, but we won’t be the last.

It’s time to rethink government service delivery.

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