Blog - the long read

Building a digital society, the Estonian way

MPP candidate Leslie Mills shares insights from his recent experience in Estonia, where he and a cohort of students from the Hertie School and the Oxford Internet Institute learned about the Baltic country's swift and successful process of digitalisation.

In mid-September 2023, a group of 20 students from the Hertie School and the Oxford Internet Institute embarked on a remarkable journey. Their destination? Estonia, a nation that stands as a beacon of digital progress in Europe. I was one of those students, and in this long-form blog, I will be sharing with you, dear reader, our three-day dive into the intricacies of Estonia's digital society, some learnings my colleagues and I made during the visit, and how a vibrant blend of technology, policy, and innovation has placed this small Baltic country on the global tech map.

Discovering the underpinnings of Estonia’s Digital Society
Our exploration into Estonia’s digital revolution began at the Mektory building within Tallinn University of Technology (Taltech), a symbol of technological progress and innovation. Gert Jervan, Dean of the School of IT at Taltech, extended a warm welcome and introduced us to the history of the institution where Skype (now owned by Microsoft) was famously developed. In a session with the university’s Next Gen Digital State research group (NGDS), we were presented with an impressive portfolio of projects and research. NGDS focuses on AI readiness, policy, and implementation, particularly with Kratt AI, which is the term used within the country’s GovTech circles to describe the use of AI within digital services. In Estonian mythology, a "Kratt" is a magical creature traditionally crafted from household items or agricultural tools, brought to life by a pact with the devil. The Kratt would then serve its master, performing various tasks – but sometimes its work did not always go well, causing problems for the master. Estonia's adoption of the term "Kratt" for its AI infrastructure is symbolic. Just like the mythical Kratt, AI in Estonia is designed to serve its users and perform a wide range of tasks – but there is also an understanding that it must be managed carefully to prevent unintended outcomes. A highlight of this session was that the NGDS group provided an intricate overview of how intent recognition works in a virtual assistant (in beta) that guides users seamlessly to relevant departments. The group also highlighted their significant work in Africa, supporting initiatives like the e-ID project in Kenya. A key learning point was a discussion on X-road, the cornerstone of Estonia’s digital infrastructure, which uses advanced encryption methods to secure data exchange across government services. This system has enabled easy and secure data exchange between governmental departments and databases, which in turn underpin the seamlessness of the e-Estonia system.

Later, we met with Hendrik Lume, Senior Partner at Nortal, a big deal in Estonia. Nortal is a multinational strategic change and technology company that specialises in providing data-driven business transformation services for both public and private sector clients. 40% per cent of the country’s digital transformation solutions originate from Nortal and the company has now expanded beyond Estonia to service clients in the US, Europe, the Middle East, and Africa. In his presentation, Hendrik gave an overview of Nortal’s collaboration model, which emphasises tech knowledge transfer, joint ventures, and capacity building. What I found intriguing was his discussion of a framework to understand the evolution of public service digitalisation in Estonia and other countries. Most countries begin at the information stage by providing access to information about public services – for example, making forms for services available for download online or limited online payment integration. The next step, the interaction stage – which involves providing citizens with the possibility to apply directly for a service with no paperwork – incorporates a digital ID for authentication and e-signatures. Estonia is at the next stage, the integrated transaction stage, which is characterised by deeper data exchange integration and an ask-once principle enabled by an interoperability platform (like X-Road) in addition to secure authentications by digital ID. Estonia is aiming for the next and penultimate stage, which is the proactive services stage in which the public administration’s digital system can proactively propose various services to a citizen based on detected events in their life journey – the birth of a new child, for example, automatically triggers social payments and a change in tax category without the citizen necessarily interacting with the system.

Our day concluded with a visit to the e-Estonia briefing centre where we were given a captivating display of the country's digital achievements. The country’s e-ID card is a prominent mascot of the e-Estonia national brand. Almost 99% percent of Estonia’s 1.3 million people have one and more than 70% use the card daily to access various public services through their smartphones. Judging by the well-produced videos and slick graphics we saw, I am certainly convinced that the country puts in a lot of work to make sure that people associate digitalisation with the Estonian national brand.

Delving into Estonia's political makeup and digitalisation of the health sector
The second day of our trip brought us to the historic Riigikogu, the Estonian Parliament, where we met with MP Zuleyxa Izmailova of the Eesti 200 party. The gorgeously pink edifice, which must be one of the most visually interesting parliament buildings I have ever seen, oozes historical significance and modernity. MP Izmailova, an advocate for various digital policies, engaged us in a thought-provoking conversation about the role of digitalisation in legislative processes, cybersecurity, and the protection of LGBT+ rights in cyberspace. We even caught a glimpse of an ongoing parliamentary session while touring the charming corridors of the building.

On a visit to the Joint Building of Ministries (or “superministry” as it is sometimes called), we met with Kristel Kriisa, AI project manager at the Estonian Information System Authority, who took us through the history of Estonia’s AI strategies. The country’s approach to AI, which began with a 3-year strategy in 2018, is now evolving into an action plan with specific Key Performance Indicators (KPIs) and budgetary estimates for 2024-2026. This forward-thinking strategy involves over 130 AI projects and integrates AI components into ten public services, including the Bürokratt virtual assistant (a preview of a use case for proactive services). In response to students’ questions about Estonia's stance on the EU AI Act, we learned that the country tends to take a relatively critical view of the Act – specifically on the potential stifling of innovation by regulation. The day's agenda also included a meeting with Nele Labi and Jaanika Merilo from the Ministry of Social Affairs, where we delved into the complexities of digitalising a nation's health sector. Estonia completely digitalised its health sector by 2007 in the culmination of a decade-long effort. There was much conversation about the pursuit of cross-border interoperability of healthcare systems within the European Union. Highly diverse data structures and the absence of standardised data structures or interoperability platforms are major obstacles to this goal. In my view, this will likely remain the case for a long time, as the health sector is highly regulated and major data protection regulations are, as they should be, very protective of this data.

Our insightful day concluded with an introduction to Estonia's e-residency system by its CEO, Liina Vahtras. The e-Residency programme offers foreign entrepreneurs the opportunity to establish a business presence in Estonia, tapping into the country's attractive tax offerings and digital infrastructure. This innovative programme was designed to extend Estonia's digital reach globally.

Fostering innovation in GovTech
The final day of our visit took our group to the Estonia Business School to meet Calum Cameron, Head of Business Development. Our goal here was to get a sense of how business schools are playing a role in nurturing Estonian digital entrepreneurship. Cameron's presentation shed light on the crucial role of educational institutions in nurturing a culture of innovation, particularly in the GovTech sector. The school's commitment to encouraging young talent to develop solutions, start businesses, and enrich Estonia's digital economy was a testament to the country's forward-thinking approach to integrating education with technological advancement.

The session with Cameron was not only enlightening in terms of understanding the academic aspect of Estonia's tech ecosystem, but also provided a broader perspective on the role of startups and innovation in national development. The emphasis on the young generation as key players in shaping the digital future highlighted the symbiotic relationship between education and industry in Estonia's digital narrative.

Reflecting on Estonia's Digital Journey
Reflecting on this trip, the question that rang clearly in my mind was “Is Estonia a blueprint for others?” The short answer to this question is “Yes, but it’s complicated”. A few points stand out to me as keys to their success.

Estonia’s early adoption of e-ID in the banking sector, supported by government backing, proved a pivotal move. This decision laid the groundwork for a broader application of digital identification, eventually permeating various aspects of Estonian life and governance. This suggests that investment in sound service design and government policies to ensure initial adoption and buy-in from an essential service provider can be essential to sowing the seeds for the long-term viability of public sector digital transformation. If users can perceive clear efficiency gains in a digital service over a manual alternative, that can drive adoption significantly. In Estonia, the use of the e-ID grew quickly over time, while the concurrently offered manual option declined because people trusted in the relative speed and convenience of the former.

Another cornerstone of Estonia’s digital transformation has been the focus on digital skills training. The government’s Tiger Leap project, aimed at equipping young people and schools with necessary computing resources, played a vital enabling role in preparing the population for a digital society. The successful initiative underlines how making sure that citizens across the demographic spectrum of the population understand how to use and benefit from digital solutions is crucial to the uptake of any digitalised service.

The nation’s openness to experimentation, flat hierarchy, and emphasis on public-private partnerships (PPPs) have significantly contributed to its success in digitalisation. It is now trying to propagate this sort of “techno-optimism” through international development cooperation with various developing economies through the Estonian Centre for International Development (ESTDEV) and its participation in projects like GovStack, a multistakeholder initiative to support developing countries on their digital transformation journey by helping them digitise public services using a bouquet of interoperable and open applications (building blocks).

My colleagues also had some interesting thoughts and reservations that I will share with you here.

Niharika Gujela (MPP 2024) noted, “There are some really good best practices that other countries can learn from Estonia, such as the effective digital governance mechanism and a strong human-centric focus. However, we must keep in mind that Estonia being a small country helped them to be able to try this”.

Krystelle Thomas (MIA 2025) reflected on her Guyanese heritage, saying “When you have the political will, technological capacity, necessity, and an internet-positive society, digital transformation can thrive. I wonder how a tiny country like Guyana could follow a similar path”.  

Catherine Kennon (MPP 2024) shared what she found most intriguing, commenting that “What I enjoyed learning on this trip was the X-Road [interoperability] platform, how e-Estonia has been adopted widely by various governmental agencies and how they built this system from scratch with the help of the private sector”.

Haytham Mones (PhD 2023) found that “The applications of digitalisation and investment made so far in Estonia are impressive. The Estonian culture also facilitates this process, which raises questions about how this can be implemented in other countries like Germany”.

Varvara Ilyana (MDS 2023) shared what she found impressive, saying “We learned that 99% of public services have been digitised, and people can file their taxes in 3 minutes and sign documents digitally which is very impressive. But the most fascinating thing for me is that, since gaining independence from the Soviet Union in the nineties, Estonia has built so much of this system from scratch and surpassed many countries in the world”.

As we wrapped up our visit, it became apparent that Estonia's journey, while remarkable, also presents a complex tapestry of challenges and opportunities. One may argue that Estonia’s unique circumstances were indispensable to its digital story and that similar circumstances cannot be repeated elsewhere. However, I would argue for a more optimistic approach of considering the country’s public sector digitalisation as a rich case study into what other countries can aspire to in terms of outcomes and best practices. I find it commendable that Estonia, through ESTDEV and other partners, is providing technical and financial support to other countries such as Benin to develop their own successfully digitalised public services.

I would like to thank Keegan, with whom I collaborated to help organise this trip, and all the participants from the Hertie School (Paul Sharratt, Jiayu Yang, Varvara Ilyina, Krystelle Thomas, Niharika Gujela, Haytham Mones, Leonard Baum, and Catherine Kennon) and Oxford Internet Institute for making this a fun and deeply informative trip.

Teaser photo by Leslie Mills.