3 lessons from Estonia - the country building the most advanced digital society in the world

Reaching greater heights often requires drawing lessons from past experiences and applying them to future goals.

Illustration photo.

This idea tends to apply to all aspects of life and digital transformation is no exception.

To become a country with the “most advanced digital society in the world”, Estonia has had to go through a continuous journey, from forming a favorable legal system to establishing secure data exchange to implementing digital identity nationwide.

The world seems to be looking to Estonia for the secret to a country’s successful digital transformation. Experts say that each country needs to have its own path to success in the digital transformation process. However, learning lessons from successful countries that have gone before will also help countries that follow to avoid mistakes.

Although Estonia is a small country located in the Northern Europe with an area of ​​just over 45,000 km2 and a population of over 1.32 million people. However, Estonia is considered one of the most advanced electronic societies in the world.

Estonia’s digital transformation success was first recognized in 2000 when it outperformed many wealthy countries in the provision of online public services and was perhaps the only country in the world where 99% of public services were available online 24/7. This meant that almost every interaction with the state, such as voting, filing taxes and registering births, could be done entirely online from almost anywhere in the world.

Only services such as marriage registration, divorce and real estate transactions still require people to leave their homes because the authorities believe that these transactions require the presence of the parties involved, the remaining services can be transacted from home. Almost everything and every citizen in Estonia is connected to the Internet: As of early 2023, the percentage of the population using the Internet was 92.3%, equivalent to about 1.22 million people; the mobile connection rate reached 146.8%, equivalent to 1.94 million, and 1.07 million social media users, equivalent to about 80.8% of the total population.

Estonia's public sector e-services are rated among the best in the world, according to the results of the 2022 Global E-Government Survey released by the United Nations.

Here are three of the most valuable lessons learned from Estonia's digital transformation journey that experts say are important for other countries to learn from.

Lesson 1: Leadership in the digital age requires courage and patience

To be successful on the digital transformation journey, leaders play a crucial role. Leaders of a country on the path of digital transformation not only need to have a digital mindset but also need to demonstrate an understanding of what digital transformation requires, have the courage to try new things and have the patience to make big changes happen.

“When new applications such as e-ID, online tax filing or e-Voting are launched, there is no guarantee that they will be successful. But the courage of the leadership to allow experimentation has made these applications widely available in the public sector,” said Hannes Astok, Development Director at the Estonian e-Government Academy.

Online tax filing is a great example. “The tax board understood that the benefits of accurate and timely tax filing outweighed any potential risks,” Astok explains. “So they decided to experiment, from digitizing the system to how they encouraged people to start using the online service.”

Experimentation is a process of learning as you go. However, the digital transformation process will have a huge impact on society, so part of the success of digital transformation in Estonia will also be determined by the admirable resilience of society in adapting to change.

“IT leaders in the public sector need to be patient during this period of social adaptation and need enough time to change old ways of thinking, maybe not in terms of technology but precisely in how they fit into social patterns and behaviors,” commented Arne Ansper, Development Director at the Estonian technology company Cybernetica.

A successful organization transformation in the digital age depends largely on how its leaders adopt and instill a work culture in which digital technology is used as a tool to synthesize information in real time rather than being completely dependent on technology. Throughout the entire work process, leaders must understand and update digital trends, the implications of those trends for work and know how to take advantage of new technology.

But that doesn’t mean they have to know how the technology works specifically, but understand why it is important and how to use it. The role of a leader is to ensure the digital maturity of an organization with a digital vision and strategy, to translate into management by aligning people, processes, technology services, interaction models, organizational structures and working models to realize that vision.

Lesson 2: Combining public and private sector forces

But leadership is not just the domain of a few brilliant minds at the top. Instead, it requires a combination of many stakeholders in the public and private sectors. The second big lesson, therefore, is that it takes a close connection and collaboration of forces to bring about an advanced digital society.

In addition to the leaders’ courage to experiment and patience, Hannes Astok also highlighted the will and consensus between the public and private sectors as well as universities in implementing the proposed plans. “There was a mutual recognition of responsibility and common goals. No one decided to go their own way and then blame others when things went wrong,” Astok noted.

Data exchange is an important example. In fact, Estonia has built the X-Road system to create a secure and standardized environment for connectivity, allowing the exchange and sharing of data between different information systems in the public and private sectors, to provide services to organizations and individuals.

In December 2001, the Estonian Government launched X-Road, a secure information sharing mechanism for citizens, government agencies and private businesses. X-Road was born out of the need to standardize the use of national databases due to the growing development of information systems and electronic services requiring cross-use of data between different databases. The ability to share information between parties reduces the need for re-entry of information and limits the problem of information discrepancies between systems. This system allows Estonian citizens to do everything with an electronic ID card (e-ID).

X-Road serves as the backbone of Estonia's e-government system, largely thanks to public-private partnerships. X-Road aims to standardize the exchange protocol between organizations, allowing organizations to connect with any service provider without the need to implement additional protocols.

Lesson 3: Government transparency and public trust are needed

Trust and transparency have played a key role in the country’s digitalization, said Indrek Õnnik, director of global affairs at the Estonian Ministry of Economic Affairs and Communications. At its core, this means embedding privacy and security at every stage of technological development.

“We have supported open source software and our systems are, as a rule, designed without any “backdoor” security vulnerabilities,” said Indrek Õnnik.

Once the “promise” of transparency has been made, it must be maintained as much as possible, even when things go wrong. In August 2017, the Estonian Information Systems Authority was notified of a security vulnerability that affected around 800,000 Estonian ID cards, one of the main means of authentication and electronic signing that over 67% of Estonians use on a daily basis.

“The first decision was that we would not hide anything and inform the citizens as much as possible, we would talk openly about the situation,” said Margus Arm, Director of the Estonian Information Systems Authority. “We revealed what we are dealing with, where we are heading and what risks we are facing. We hope that this openness will maintain citizens’ trust in our digital state.”

When the incident occurred, all relevant agencies immediately began to address the issue without finding a single person at fault or hiding anything from the public. Authorities quickly provided means to remotely renew the affected ID cards, of which half were renewed by the end of the year.

In retrospect, this was undoubtedly the right approach. Just a few months after the incident, local elections saw the largest turnout ever, a sign that public trust in the state’s digital infrastructure had not been severely damaged. It is believed that the authorities’ strategic, transparent and extremely swift action played a key role.

The information transparency policy has helped the system gain users' trust and bring about clear results. In addition, all transactions between the government and people and businesses are closely monitored to create transparency.

In short, one of the key factors that has made Estonia successful in its digital transformation to become a leading digital society today is the trust that its citizens have in their government. This trust is demonstrated through small but determined digital transformation projects that have proven successful. From bringing computers to every Estonian school in the mid-90s to implementing e-voting, e-health…. These initiatives have improved the lives of citizens without diminishing their trust in the government.

Besides trust, another important factor is the transparency of Estonia's digital infrastructure, i.e. an Estonian e-citizen can log into the government portal interface, where citizen information and data are stored, to view his or her information and see who has accessed his or her information.