Why Estonia pioneered digital identity

Estonia topped a poll of the most digitally advanced nations this year, according to research conducted by global community network InterNations. They praised Estonia for offering expats and digital nomads the ability to live a more connected life, and hence a better work-life balance. 

Comparatively, the UK did not make it into the top 10, despite the fact that UK tech firms have received record-breaking investment over the last year, according to Tech Nation. Meanwhile, the rest of the world is looking up at Estonia, a small  country of just 1.3 million people, to provide digital solutions. The country is home to more tech unicorns - private companies valued at $1bn or more - per capita (more than any other small nation in the world). 

The e-Residency programme, a government initiative introduced in 2014 that encourages non-Estonian entrepreneurs to start businesses in Estonia (and by extension the EU), is just one part of the Estonia’s digital strategy. European countries are currently faced with technology developing far beyond the capabilities of their infrastructure, but Estonia, being a small country with a digitally forward-thinking government, welcomes the change.

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Where did it all start?

Although we could look back to Estonia’s declaration regarding internet access being a human right as the beginning of our journey to becoming the most advanced digital nation, we have to consider the nation’s history as a country that fought for its independence from the soviet bloc, to ascertain why such rapid development took place.  

According to Ott Jalakas, the COO and co-founder of Estonian tech company Lingvist, the lack of investment in technology during the Soviet era meant that by the time they began to modernise in the 1990s, their base infrastructure was more advanced than that of other countries. This meant that subsequent innovation has been based off of much more modern systems - databases in the UK and other countries are based off of 1980s architecture, whereas everything began in the 1990s for Estonia so they skipped over the tech that was deployed back in the 80s.

Fast-forward to 2014, Estonia introduced an e-Residency programme, which tells the tale of its digital rise. E-Residency is a government-issued digital identity and status that provides access to Estonia’s e-services and a transparent business environment for companies and micro-businesses to work over the internet as part of the EU. 

Now nearing its five-year anniversary, e-Residency has grown to become a community of nearly 60,000 digitally empowered citizens from around the globe. Over 6,000 business have been started as a result of the initiative, and millions of pounds have been contributed to the Estonian economy, demonstrating how being digitally advanced has opened doors for Estonia to become more self-sufficient and make a name for itself amongst some of the other European power-houses.

The e-Residency model has been so successful that big names such as Barack Obama and recently the Pope, have accepted invitations from the Estonain government to join the  e-residency initiative! It's initiatives like this that will give people more freedom in the years to come. Borderless and flexible working will be far easier with a digital ID that permits people to work anywhere, and thanks to Estonia leading the charge and bringing this digital ID program to the world stage, companies and organisations have the chance to give their employees more flexibility, which will no doubt lead to more productivity and success for their respective workforces. With 89% of businesses and employees finding flexible working a big motivator for their productivity, giving workforces more access to this type of working will be crucial going forward. 

Estonia has already seen the beneficial economic impact of introducing the e-Residency programme. As e-Residents often work across borders, they have also been great in spreading Estonia’s cultural values to the wider world, and have been instrumental in the rise in e-Residents we’ve observed worldwide. Estonian President Kersti Kaljulaid has now also unveiled a roadmap for “e-Residency 2.0”, which will further improve the offering for entrepreneurs, and include more ways for e-Residents to enjoy Estonian culture.

Inspiring other countries to innovate

Other governments are following suit , learning lessons from the Estonian success story. Recently Dubai unveiled its 50-year charter which includes plans to create virtual economic zones where people elsewhere in the world can obtain digital identities, much like the Estonian e-Residency model. Lithuania have also announced a similar programme, with intentions to give people from overseas access to Lithuania's public and commercial services. 

A universal desire for a more connected world can bring countries together by promoting borderless working through programmes such as e-Residency, serving a unified rather than divided global mission. It’s only a matter of time until the UK offers its own version of e-Residency in order to export its business environment and culture – and ultimately make more friends around the world.

An ode to the rankings, Estonia could not simply leave the programme as it was created. Development and indulgence in new tech and digital entities is what makes this nation a front runner and a nation to be exemplified, which is why Estonia will continue to innovate and transform the way businesses and individuals around the world operate.

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