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This Tiny Country Is the World Leader in Technology

I spend most of my year in the city of Bangalore, India with a population of 15 million. The rest of the year, I spend in Lucknow with my parents, with a population of 2.8 million.

Today, I introduce you to a tiny country with a population of 1.4 million nestled in the northeastern corner of Europe.

After the fall of the Soviet Union in 1991, the Republic of Estonia gained complete independence.

In 1991, Lennart Meri, Estonia’s first president asked a pivotal question that would determine the future of this nation:

As expected, to get rid of the Soviet economy, Estonia ditched lethargy for speed. The country encouraged free trade and privatization but the key difference in the Estonian economy was the focus on public sector efficiency - an area where even the most advanced economies like the US sometimes struggle, forget about developing ones like India.

Estonia did something unique by introducing bottom-up technological innovation in bureaucracy. It encouraged government departments to find their own low-cost and innovative solutions to their respective problems. This led to a natural network within the public and private sector.

Later, these networks were institutionalized by various programs such X-Road, e-Estonia, e-Identity and so on…

Let’s jump to the present. What do I mean when I call Estonia the world’s first digital democracy?

All government services in Estonia are available 24×7 on the internet.

Your medical records? Online.

Paying a traffic fine? Online.

Casting votes? Online. 10 minutes.

Paying taxes? Online. 10 minutes.

Starting a business? Online. 20 minutes.

Starting a company in Estonia from another country? Online.

In fact, the public sector is so efficient that it takes around 18 minutes to create a registered company in Estonia!

Access to the internet has been a fundamental right since 2000. All schools have access to the internet. Most educational expenses are paid by the government or are very cheap. Over 70,000 people from 160+ countries have become e-residents of Estonia.

The cornerstone of the Estonian model has been transparency. You can see who has accessed your data anytime using the government portal.

Estonia is the home to companies like Skype, Wise, Pipedrive, Bolt, etc.

So, is Estonia the perfect digital democratic utopia? Well, they have their problems.

In 2007, the country faced a series of cyberattacks. Eventually, Estonia came out stronger. In a digital economy, privacy will always be a concern; no matter how strongly the State stands up for transparency.

Estonia is a member of the NATO and a neighbour of Russia. Other than the unique “Estonian Attitude,” it does not have many natural resources to speak of.

However, Estonia has constantly performed well on all economic and human development parameters. The nation has always been under different coalition governments. It’s amazing how well Estonia has progressed when this is also considered as a regular change of ruling ideologies is often considered a drawback in democratic societies. Its debt-to-GDP ratio stands at a meagre 19.6% (as of 2023) compared to 30-40% in very well functioning economies and 123% in the United States (as of 2023).

Estonia is a living proof that democracy is the best form of government for efficiency through digitization. The digital democratic model sounds like an eventual inevitability to me.

But, with larger populations and different geopolitics, new challenges will emerge.

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