“Estonia’s success is built on a combination of historical lessons, strategic international cooperation and an unwavering commitment to digital integration in every facet of governance.”
Toomas Hendrik Ilves, president of the Republic of Estonia from 2006 to 2016, detailed Estonia’s remarkable journey from post-Soviet austerity to digital pioneer in an interview with Delano’s sister publication Paperjam. It’s a narrative he plans to expand upon at the upcoming Sphere conference, taking place on 28 and 29 May in Helsinki, Finland, where he is one of the keynote speakers.
Starting in the early ‘90s, Estonia faced a significant economic gap compared to its neighbors. “Estonia was extremely poor coming out of the Soviet Union, especially relative to Finland,” Ilves recalled. The disparity in GDP per capita between the two countries was more than eightfold, posing a daunting catch-up challenge. “The whole point of my raising the Finnish example is that before WWII Finland has a GDP per capita slightly lower than Estonia’s.”
Ilves, who learned to code as a teenager in 1971, was well-placed to leverage the burgeoning world of technology. His early exposure to programming and subsequent career provided him with a unique perspective that proved crucial in his later political role. “I always had an eye on what was happening in technology,” he explained.
The digital shift began in earnest with putting computers in schools in the late ‘90s. “By 1997-98, all Estonian schools had computer labs, and they were all connected,” said Ilves. This initiative prepared a generation for a digital future and laid the groundwork for widespread internet adoption.
It was essential to make digital IDs mandatory to encourage widespread adoption.
The former president also highlighted the strategic use of Estonia’s digital ID cards, which were introduced in the late ‘90s. “It was essential to make digital IDs mandatory to encourage widespread adoption,” he noted. This policy was pivotal in ensuring that digital services would be developed and used broadly across the country.
Ilves’ foresight in digital security and infrastructure innovation led to the development of the X-Road system, a secure distributed data exchange layer that now serves as the backbone for Estonia’s e-services and is used by 25 countries.
Estonia’s digital leap was catalysed by historical fears and modern opportunities. Following the multiple invasions it has experienced throughout its history, Estonia, under Ilves’ guidance, forged a significant digital data backup agreement with Luxembourg. This partnership, anchored in the shared understanding of small nations about the importance of security and digital sovereignty, leverages Luxembourg’s robust data infrastructure to protect Estonia’s critical national data against physical and cyber threats. “In light of our history, we sought a partnership where our data could be safe, irrespective of local threats,” Ilves explained. This innovative approach uses encrypted real-time connections to sync data related to every vital record--from births to land purchases--between the two countries.
Skype as a catalyst
This technological foresight was not just about infrastructure but also societal transformation. The development of Skype by four Estonians in 2003 catalysed a significant cultural shift towards entrepreneurship and technology, propelling Estonia to the forefront of digital innovation.
Economically, Estonia’s rise as a digital frontrunner is underscored by its startup ecosystem, notably its success in cultivating ‘unicorns’--startups valued at over $1bn. “From Skype, which was born here, to a total of ten unicorns, Estonia has shown that innovation doesn’t need a large population, just a conducive environment,” Ilves remarked. One standout is a company, Transferwise, now Wise, that reached the largest IPO in London, signalling Estonia’s disproportionate impact on the global tech scene.
The value of Estonia’s digital transformation becomes most evident in its healthcare system. Under Ilves’ administration, Estonia implemented a digital health record system that is now a model across Europe. “Our system not only secures patient data but also makes it accessible across borders,” Ilves stated. This capability demonstrated its value when Ilves, while needing urgent medical care abroad, could instantly provide his comprehensive medical records to foreign doctors, showcasing a significant advancement in medical care accessibility and safety.
Today, Estonia stands as a model of e-governance, with nearly all public services available online, the exception being divorce. As Ilves proudly stated, “Estonia is now a place where public services are seamlessly integrated into the digital age.”
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