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The virus-proof digital state

Innovators and economists have suggested that Estonia may be one of the best-prepared countries for the global COVID-19 pandemic. Why? Estonian digital state infrastructure, a problem-solving mindset, and a society accustomed to a digital way of life. While naturally focused on active crisis management, the public and private sectors in Estonia are also looking ahead: what will the post-COVID world look, like and what value can Estonia bring to this new reality? 

The following is a translated, and slightly modified version of an opinion piece by Priit Alamäe (Nortal), Robert Kitt (economics expert) and Marek Helm (Nortal) originally published via postimees.ee.

There’s a meme circulating online that asks: “Who led the digital transformation of your company?” The options are CEO, CTO, or COVID-19.

The moral of the story is that, despite constant talk of innovation and digitalisation in boardrooms or at government meetings, real change begins only when the old way is no longer viable. In economic theory, innovation is often equated with Joseph Schumpeter’s “creative destruction,” which holds that the new method is so much better, that the old is set aside or destroyed completely.

Today it is clear that some of the old ways are no longer viable. In many countries, however, it is not possible to reorganise all of society within a day. Many countries simply lack the necessary preconditions, readiness, or adequate infrastructure. Within a very short period of time, social distancing measures have dramatically changed people’s study, work, and consumption habits across the globe.

Students in Estonia have long been using the online school management platform, eKool. All of the necessary infrastructure for virtual teaching to work already exists. Sure, some online functions have been around for years, but academic work has still been conducted in a traditional classroom setting; there was simply no need for any other setup.

Nowadays, “classes” have quickly migrated to Microsoft Teams or Zoom. Schoolwork takes place entirely in the virtual schoolhouse. Even choir practice takes place with the support of the virtual environment. Over decades of digital innovation, Estonia has laid the foundation for all of this to work. But now it’s time to think ahead: which social changes are here to stay?

Cultural changes as the key to success

No part of life can be digitalised without changing the essence of the activity itself. For example, scanning paper invoices—which some countries consider to be a digital marvel—is not digitalisation, but rather digitisation. These are nothing more than scanned paper documents. E-invoices in Estonia have been the mainstream for a while but more importantly, we have taken steps to digitalise the entire infrastructure underlying accounting processes. Accounting programmes automatically communicate with banks, which subsequently have direct connections with the Tax and Customs Board and other state institutions. This is not just about chasing efficiency, but rather upgrading the entire business culture. Automatically-compiled and formula-based reports are less prone to mistakes—both accidental and intentional—when compared to manually-compiled Excel sheets.

As a small, open economy, there is no doubt Estonia will take a substantial hit post-COVID. There is no economy in the world that was prepared for a crisis of this scale. And we can be sure that after such a global shock, many social paradigms and habits are bound to change. As working from home becomes evermore accepted, and e-commerce skyrockets, every company should ask itself: how does my business fit into the post-COVID world?

It is time to examine those activities that have been disrupted by social distancing measures, and to evaluate the extent to which we should return to the status quo. Perhaps there are better alternatives. After all, people’s behaviour has irreversibly changed in such a short amount of time. We ought to think two steps ahead: how can we emerge from this crisis stronger than before?

Ensuring state function during a crisis

While no economy could have been fully prepared for this pandemic, Estonia as a country was, and continues to be, among the most ready in the world.

We are not talking about the readiness of our healthcare system to handle the pandemic, nor of our political decisions. We are talking instead about the functionality of both government and non-government services and communications, at a time when people cannot meet and papers cannot be physically signed. We are talking about maintaining the functionality of the state. 

Estonia has long shared its digital state experiences around the world—through economic diplomacy as well as through supporting the development of e-services in many countries. Moreover, Estonia is one of but a few countries where the e-state is viewed as a matter of hygiene. This holistic, underlying approach compares with more haphazard approaches elsewhere, where e-services seem often to be developed in response to progressive leadership here-and-there, or simply because “others are doing it too.”

Digitalisation to protect democracy

Estonia’s impressive e-governance and innovation goes beyond digitalisation; But it is not only about digitalisation. It is also about fundamental values.

In Estonia, pursuing and trusting innovative and smart solutions has become the norm.

Estonians accept that effective digitalisation increases transparency and security of society writ large. The same cannot be said about most other countries.

Estonia is the only country in the world where, even under lockdown conditions, two critical pillars of democracy can continue to function: elections with sufficient voter turnout, and the court system.

Within the next few months, various kinds of elections are set to take place in Spain, North Macedonia, Serbia, Poland, and Iceland. Even if elections are held, not many voters may dare to go to ballot boxes, thereby resulting in low and questionable mandates.

A lot of the examples above refer to what Estonians see as “normal life,” which now is simply  lived from the comfort of our homes. We must adapt to new routines, but our children attend (virtual) school, we can vote securely from our computers and smartphones, and state services continue to function. In many countries, “social distancing” means that many critical state services—including core democratic mechanisms—come to a standstill.

Looking to future

If digitalisation used to be a choice, then today it is a matter of survival and of maintaining the availability of critical systems and services—which can be at the very core of a country’s democratic functions. When others have turned to Estonia in recent weeks to ask about what changes we have had to make in response to the pandemic, we answer that we have not needed to change anything. Our services are already designed so as to continue business as usual under emergency conditions.

It is clear that Estonia’s experience as a digital nation has increased in value and necessity to unprecedented levels in just a few weeks. Unfortunately, this is most likely not the last pandemic that we will witness. Global preparedness for such situations has become more important than ever.

Over the coming years, Estonia can provide value to the crisis recovery process, by sharing its experience of how state services, the economy, and society at large can keep operating, even under exceptional lockdown conditions. This pandemic will change the world. Estonia can help lead the way forward.

Translated by Adhele Tuulas and Juku Gold.

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