Estonia – a European and global leader in the digitalisation of public services

Estonia ranks 7th in the DESI 2021, with a score higher than the EU average. The country is a frontrunner in Digital public services and performs very well on Human Capital. There is room for improvement in Connectivity and the deployment of 5G. 

“Estonia has achieved a lot on our digital journey, and I am pleased to see that we are once again ranking first in the development of digital public services and among the European top10 countries overall. We are rightfully known as the most advanced digital society in the world. Still, we do have our challenges,” the Estonian minister of Entrepreneurship and Information Technology Andres Sutt noted.

According to the minister, the recently adopted new Digital Agenda 2030 will be the cornerstone of future digital developments. It sets goals and an action plan for maintaining what has been built in the e-Estonia so far and at the same time further developing the Estonian economy, state and society with the help of new digital technologies.

The 1st in digital public services…

Estonia ranks 1st place in the EU on Digital public services and continues to be a strong frontrunner in this area. The share of e-government users has slowly increased in recent years, accounting for 89% of total internet users in the country. Estonia performed better than in 2020 in the number of users using pre-filled forms, scoring 97 (out of 100), and well above the EU average (63).

…but lagging in 5G

On Connectivity, both fixed- and mobile broadband take-up is high. Estonia has high overall coverage of fixed Very High Capacity Network (VHCN) connectivity, except in rural areas where additional investments are needed.

But on a more critical note – the country lags in providing 5G commercial service because the spectrum resources necessary to operate 5G networks have not been allocated yet. Nevertheless, Estonia’s ambition for 5G connectivity is to cover major cities by 2023 and transport corridors by 2025. Estonia has not yet met the Gigabit Society targets. Its ability to meet these targets will depend on the timely adoption of its digital strategy 2030 and the allocation of the 5G ‘pioneer’ bands.

Estonia’s new digital strategy for the period 2030 will be the cornerstone of future digital developments in the country. It will encompass ambitious targets for digital, with a strong focus on digital public services, Connectivity, and cybersecurity.

SMEs need more attention, although e-Invoicing is booming

On the Integration of digital technologies by businesses, the significant potential remains untapped. Despite a very active start-up scene in the country, including some ‘unicorns’ (IT companies that are not yet listed on the stock market but which are privately valued at more than USD 1 billion), not all Estonian businesses are taking full advantage of digital technology and the online economy. According to the report, Estonia needs to continue its efforts to better integrate digital technologies, particularly in Small and Medium-sized Enterprises (SMEs) and more traditional businesses.

Although, our eagle-eyed Managing Director Ave Lauringson noticed a significant improvement in one field concerning companies – the usage of e-Invoices spiked in 2021 to 62% of companies now using them – up from 23% in 2020, and significantly over the EU average of 32%.

Frontrunner in e-government

On Digital public services, Estonia is already well-known for being a top performer in the digitalisation of its administration. It has well-developed e-government systems, with all central government functions and municipalities providing services online. Despite already being a frontrunner in this area, Estonia continues to invest significantly in its e-government services to ensure the country offers the latest technologies to its citizens. Similarly, the COVID-19 pandemic has also demonstrated that Estonia could lead Europe to implement innovative e-health solutions.

One of Europe’s leading countries for digital skills

On Human capital, Estonia ranks 5th, making it one of Europe’s top countries for digital skills. With 62% of Estonians having at least basic digital skills, the country is comfortably above the EU average on this measure.

Decent number of ICT specialists, not enough ICT training

In 2020, ICT specialists accounted for 6.5% of the employed population (EU 4.3%), and ICT graduates represented 8% of total graduates in 2019, significantly above the EU average of 3.9%. However, only 17% of Estonian companies provided ICT training to their employees in 2020 (the same percentage as 2019), below the EU average of 20%. There is a slightly higher share of female ICT specialists in Estonia than in the rest of the EU, although the gender gap remains wide: only 22% of ICT specialists are women (although higher than the EU average).

In addition, Estonia expects to train an additional 7,000 ICT specialists between now and 2027.

Highest number of unicorns per capita

The Estonian start-up ecosystem is very vibrant. There are 1,126 start-ups currently operating in Estonia, according to the most recent data from the Estonian Start-up Database. In 2020, these start-ups generated EUR 782 million in turnover in the country, 43% more than the year before. They also made the labour market more dynamic, employing 6,072 people locally at the end of 2020.

These start-ups benefit from solid and efficient support from State services through the government’s Startup Estonia platform, which aims ‘to supercharge the Estonian start-up ecosystem to be the birthplace of many more start-up success stories to come.’

This support and ecosystem have proven to be successful. Estonia is now the country in Europe with the highest number of unicorns per capita. In total, there are seven unicorns founded by Estonians and/or based in Estonia.

In the last two years, Pipedrive.com (founded in 2010, became a unicorn in 2020.), Zego.com (founded in 2016, became a unicorn in 2021.), and ID.me (founded in 2010, became a unicorn in 2021) joined the four already existing Estonian unicorns: Skype.com (founded in 2003, became a unicorn in 2005), Playtech.com (founded in 1999, became a unicorn in 2007), Wise.com (founded in 2010, became a unicorn in 2015) and Bolt (founded in 2013, became a unicorn in 2018).

Increasing the score of open data progress

In 2021, Estonia also made progress on open data, increasing its score by 24 percentage points compared to 2019. This significant improvement is because public data are increasingly made available to a broader audience. In early 2021, the Estonian Open Data Portal hosted almost 800 datasets from more than 100 publishers, covering agriculture, education, energy, health, governance, and transport. These datasets can then be freely used by academic researchers, start-ups, and companies to build new services or extend existing ones. In addition, the Estonian authorities also significantly improved the cross-border availability of information.

For example, the three Baltic states already allow cross-border exchange of information from their population register, and in 2020 Estonia also started sharing data via the X-Tee (X-Road) initiative with the Finnish authorities. The data are only collected once by one specific institution from one country (the ‘once-only principle) and securely and confidentially.

Estonian government cloud

Estonia has experimented with cloud technologies and completed a pilot project called ‘Estonian government cloud.’ This pilot project proved that cloud technology works for public-sector IT applications and that it is worth considering the more widespread use of cloud technology. In parallel, the government is further investigating public-sector use of cloud computing to understand better what kind of data can be kept on the cloud and what cloud services are required. Estonia is working to build its government cloud to meet these needs.

The 1st country to use vaccination certificates

Estonia was the EU’s first country to use vaccination certificates (having set up a certificate system in April 2021) and has strongly advocated for the EU’s digital COVID certificate (for vaccination, recovery, and testing).

In October 2020, the World Health Organization (WHO) and the Estonian government signed a memorandum of understanding to develop distributed digital infrastructure providing health solutions to the COVID-19 pandemic and other public health needs. In February 2021, the country began working with the WHO on a pilot project to investigate the use of globally recognised electronic vaccine certificates.

Continuously ambitious in e-governance

Estonia continues to work on ambitious projects further to improve its leading position in digitalising public services. The recent pandemic has allowed the country to position itself as a world leader in this area. The new cybersecurity strategy is expected to bolster further Estonia’s position as a European and global leader in the digitalisation of its public services.

97 million euros to further improve public services

Estonia plans to advance the already well-digitalised Estonian public administration further. Almost half (47%) of the measures supporting the Estonian plan’s digital transformation will aim to further digitalize the administration and public services. The total budget for these investments will be EUR 97.43 million.

Meet Estonia’s virtual assistant #Bürokratt. 

The most important measures within the plan are as follows:

• The reconfiguration of essential digital public services and the safe transition of these services to cloud infrastructure to increase their resilience, security, and reliability. The IT systems and services of the Estonian public authorities will be migrated to a private cloud and will require large-scale security testing.
• The development of business-event services and a digital gateway improve efficiency in delivering public services and reduce the administrative burden for businesses.
• The redesign of several public services (and the underlying IT systems) to enable their automatic delivery based on life events or business events experienced by citizens (such as a marriage, the birth of a child, or the creation of an enterprise).
• Setting up a national, virtual-assistant platform in the #Bürokratt programme to improve the user-friendliness of access to online public services in Estonia.
• The creation and development of a centre of excellence for data management and open data to foster better control of the data collected and held by the Estonian public authorities. This will aim to improve the quality of the data, increase its use for decision-making, and make the data available as open data so that other stakeholders may also reuse it.

“We have focused directly on people’s well-being and convenience: people have to have the best experience of the digital state, feel safe and secure in our cyberspace, and have good communication connections guaranteed everywhere in Estonia. In terms of public services, we focus on quality and the value created for people in the form of (user)experience, both through proactive life services and making use of the possibilities of AI,” concludes minister Sutt.

According to the Estonian IT minister, the foundation of digital society is high-quality communication connections, where Estonia still has room for development according to the DESI index. “In the following years, we are working on various support measures to accelerate the spread of high-speed internet networks and 5G infrastructure. However, all of our digital state is based on cybersecurity, without which there would be no trust and no users of digital services. We contribute to ensuring that Estonian cyberspace continues to be secure, reliable and withstands the growing cyber threats in the world, “minister Sutt said.

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