Estonia’s Rise from Soviet Shackles

Today, as I opened my Bolt app to order a ride, my mind went to the country of Estonia.

When this tiny East European nation broke free from the jaws of the colonization wrath by the Soviet Union in 1991, it was a poor, laid-back country. By 1992, its GDP per capita had fallen 17% year-on-year to $2,849. By this time, the country’s GDP was 13 times lower than that of neighboring Finland.

But its leadership was determined to make something of their independence.

Enter Toomas Hendrik Ilves.

As Estonia restored its independence in 1991, Ilves became Ambassador of Estonia to the United States in 1993, also serving as Ambassador to Canada and Mexico at the same time. He was born in Sweden to Estonian parents, who had fled Estonia after its occupation by the Soviet Union during World War II. From there, they took him to the United States where he earned degrees from Columbia University and the University of Pennsylvania.

It was also in the United States that he encountered a math teacher who was doing her Ph.D. in Math Education and who decided to teach a small group of them how to program. At the age of 14, Ilves was programming in Basic. This was a unique experience, and it had a huge influence on him which would prove inspirational for him in later life.

So, when Estonia gained independence, leaders had to ask themselves: In 1938, the last full year before World War II, their country was on the same level as Finland. How is Finland now so much better? One of the things they associated Finland’s prosperity with was the enormous success of tech in Finland, with Nokia of course being a chief example. Ilves was also personally influenced by Mosaic, the first web browser created by Marc Andreessen.

From there, Ilves became convinced that the country had to push for a radical digitization of the country. The first step was a program that was implemented in 1995 which was to put all Estonian schools online. That was completed by 1998. All Estonian schools had computer labs which were open to the public after-hours to encourage other people to use them. That was the first big step in digitization.

This initiative was part of a larger program known as Tiigrihüpe (Tiger Leap), proposed by Ilves. Also included in this package was Estonia’s e-cabinet, one of the first electronic cabinets in the world. Cabinet meetings began to take place without the need for paper. Estonia also launched e-banking services, ensuring that banking was accessible 24 hours a day, 7 days a week from the comfort of Estonian citizens’ homes.

To place these initiatives in perspective, at the time that the project was launched, only 1.7% of the world had access to the internet.

By 2000, Estonia broke new ground by passing legislation that declared access to the internet as a fundamental human right and took it a notch higher by ensuring that all Estonians could declare their tax online via e-tax. In the same year, M-Parking began — a mobile parking service that allowed citizens to pay for city parking via SMS.

And in 2001, the launch of X-Road revolutionized the way government databases securely connected. It allows the nation’s various public and private sector e-service information systems to link up, exchange data securely, and function in harmony.

In 2002, E-identity cards and e-signatures were launched.

Even more significant is that by 2005, Estonia had become the first country in the world to allow voters to participate in the parliament election using the Internet. The system allows citizens to vote from anywhere in the world using their national ID card and a special PIN code. The process is entirely secure, with each vote encrypted and stored on a secure server.

By 2006, Ilves himself had become the country’s president. He would be in charge for 10 years. During his time, he ushered Estonia to become a world-leader in digitalization. For example, Estonia’s e-residency scheme attracted many headlines worldwide — being the first of its kind. Launched in 2014 by the government, it suddenly became possible for non-Estonians to receive their own digital identity and special status within the country.

“E-residents” are able to access key Estonian services from afar, including banking and company formation, which acts for many as a gateway into the European market. By encouraging new businesses to set up within the country, the scheme has undoubtedly contributed to its renown as the country with the highest rate of startups per capita in Europe.

The implementation of the policies has not been without its challenges. For instance, the cyber attacks in 2007 by a group of Russian hackers led to waves of misinformation spread which caused chaos in the streets of Tallinn, and banks and government bodies experienced external pressures that brought their systems to a halt.

In the wake of the attack, Estonia became home to the NATO Cyber Defense Centre of Excellence, which conducts large-scale cyber defense drills. The government also created a data embassy in Luxembourg where it stores copies of all of its data. The country also became the first country to implement blockchain technology within its digital infrastructure, ensuring that sensitive data retains its integrity by becoming increasingly decentralized.

Really, the country’s digitalization efforts and the impact on its people speak for themselves: Taxes are completed online in under 5 minutes, and 99 percent of Estonia’s public services are available on the web 24 hours a day.

For its e-Residency program, more than 100,000 people from around the world have applied for it since it launched in 2014. Efforts like this and the digital nomad visa, along with business-friendly tax rates, have helped encourage a start-up culture in the tiny Baltic nation.

Skype, the video chatting service that was bought by Microsoft, was launched in this country of 1.3 million people in 2003. Today, the government boasts it is home to more tech unicorns, private companies valued at more than $1 billion, per capita than any other small country in the world. Its recent unicorns include payments firm TransferWise and Bolt.

So, as I wait for my Bolt ride, I can’t help but admire Estonia’s journey from Soviet shadows to digital stardom — a tale of modern progress worth cheering for!

And it holds many lessons for a country like Nigeria.