One country taking seriously the importance of digital infrastructure for the future of self-governance in the 21st Century. The country of e-residency wonders why others are more skeptical.
ESTONIANS are among Europe’s least pious folk. Just 2% of the population attend services weekly in the medieval churches of Tallinn, or anywhere else. A growing number of the inhabitants of this forested, sparsely populated land subscribe to the nature-loving precepts of neo-paganism. But there is only one faith that truly unites Estonians. Broach the subject of digital technology, and you will be amazed by their fervour.
Estonia has carved out a niche as a startup hub and a friendly environment for foreign businesses. Its biggest innovation, however, lies in e-government. Citizens of this tiny Baltic nation can conduct almost every encounter with the state online. A digital-signature system makes official transactions a doddle. Armed with an ID card and a PIN, Estonians can vote, submit applications or sign contracts in seconds. Officials claim this lifts annual GDP by 2% while saving a mound of paperwork and creating opportunities for business. Estonians abroad lament the red tape involved in even simple tasks like applying for a driving licence.
These achievements have made e-government a potent source of soft power for Estonia. Its latest startup is an e-governance academy designed to spread the word, and pilgrimages to Tallinn are now compulsory for governments curious about digitisation. “Is it true that there’s only 1.3m of you? I don’t believe it! You are everywhere,” exclaimed an African emissary on a recent visit. Japan has built an ID system with Estonian help. Its prime minister, Shinzo Abe, is one of over 21,000 foreign “e-residents” of Estonia, all of whom can incorporate businesses in the country without setting foot in it. (The first was one of Charlemagne’s colleagues.) Estonia is aiming for 10m e-residents by 2025. Many of them, it hopes, will be British entrepreneurs otherwise severed from the European Union’s single market by Brexit. “E-residency”, says an official, “is our gift to the world.”
Now, as Estonia assumes the rotating presidency of the EU’s Council of Ministers, it has been granted a pulpit from which to preach the digital gospel to the rest of Europe. As well as managing legislative disputes between the EU’s 28 governments, Estonia will spend the next six months pressing its vision upon the rest of the club, which, it fears, may be left behind by more digitally astute policymakers in other parts of the world. The crowning moment will be a “digital summit” in September, which almost all of the EU’s leaders will attend.
Chief among Estonia’s plans is a proposal to expand the EU’s familiar four freedoms—the unhindered movement of goods, services, capital and people across borders—to include a fifth: data. Data-localisation rules can hinder cross-border trade as effectively as tariffs on goods, or regulations that protect service industries. (The European Commission counts over 50 such laws across the EU.) By one estimate, a fully functional data market could raise the EU’s GDP by about €8bn ($9.1bn) a year. Data-sharing between governments can make life easier for travellers, too. Optimists hope that a pilot programme between Estonia and neighbouring Finland to share medical records, which enables travelling patients to pick up prescriptions in either country, could serve as a prototype. And because Estonia’s platforms are open, businesses can build upon them to provide their own services.