Estonia 2.0: Rebooting a Nation

Today, Estonia is best known for its role in the creation of Skype (RIP), for its relentless pursuit of digital government – enabling everything from online voting to digital divorce – and for being the home of Europe’s New ‘Iron Lady,’ Kaja Kallas. But thirty years ago the country would likely have been known as one of newly re-independent nations of Europe struggling to eke out a place in the global market and deal with the numerous dysfunctions plaguing the nation thanks to decades of Soviet mismanagement, corruption, and abuse.

How, in a single generation post re-independence, did the country go from economic basket case to global leader in digital government and a key startup hub whose entrepreneurs have helped birth companies including Wise, Skeleton, Milrem Robotics, and Frankenburg Technologies? That’s the question that inspired me to write Rebooting a Nation. I had spent a fair amount of time in Estonia, including a brief stint working for the country’s vaunted e-Residency program as Head of Business Development. However, I left with a sense that there was more to the country’s story to be told than what various media outlets had covered over the years, often with over the top headlines about Estonia’s e-government and tech prowess. Most coverage talked about one or two of the country’s marquee government programs like the Tiigrihüpe (Tiger Leap) campaign of the late ‘90s which connected every school to the web, but failed to dig deep into the story behind Estonia’s unlikely rise and glossed over the many problems the country encountered along the way.

I thought it was important to try to get to the bottom of the question, not just because I found Estonia interesting, but because after returning home to the U.S. and advising members of Congress on tech policy, I was deeply concerned about America’s ability to compete in an age of AI and rapid technological change. While America may be home to many of the companies ushering us into the future, our government is stuck in a mindset more appropriate for the industrial age than a digital one. Our lack of technical state capacity has already been a serious impediment to the government’s ability to deliver public services, a trend that seems unlikely to change anytime soon. Perhaps this is American naivete, but I believe that if Estonia could modernize and become a global leader after coming from such dire straits, surely we can too (and for that matter, so can the UK or any other nation with enough willpower). And while the journey Estonia took certainly isn’t the one that America will take for any number of reasons, from cultural differences over topics like privacy to the burden of decades of legislative kludge gunking up the gears of government operation, Estonia’s journey is one worth studying.

Whether the rollout of online voting from anywhere in the world to increase democratic participation, an e-tax system that reduces the time to file tax to under 5 minutes for most people, effectively building a leading European startup ecosystem though sustained public support for technical education and investment in connectivity, or the development of a Cyber Defence Unit which effectively brought top private sector cybersecurity expertise into military the chain of command in case of attack, Estonia has no shortage of case studies for those interested in government modernization and building tech ecosystems. While Rebooting a Nation dives deeper into each of these topics, there was a clear throughline connecting the Estonian nation’s ability to push their country to global tech leadership: a mindset that prioritizes innovation, bold leadership, and building things that matter and solve real problems. According to now former Prime Minister Kaja Kallas, “When I speak to people outside Estonia, then I’m often asked what is behind our digital and e-governance success. And I always explain, it’s about mindset.”

Indeed, it has been a unique mindset that has propelled the country forward. Individual politicians had the mindset that they had to make bold changes in order to make up for the decades of lost time that created a massive chasm in quality of life between Estonia and their Nordic neighbors and they were willing to take risks to do it. At a time when the country was struggling financially, a significant portion of the budget was spent on connecting schools to the internet. Digital identity was made mandatory at a time when few understood the benefit of the card, an unpopular move with real political cost. Government intrapreneurs like former CIOs Siim Sikkut and Taavi Kotka developed unique programs like e-Residency with the support of most members of parliament despite questions over the immediate benefit of the program to Estonian citizens. The list goes on, but what is critical is to absorb the idea that what matters is the mindset of the people. Estonia, a country of 1.3 million bordering a revanchist Russia, has inculcated a mindset throughout its government that makes it a global leader in e-government and tech, and increasingly in defense. In many ways the story of Estonia is similar to that of Israel and Singapore, two other nations in tough neighborhoods with few natural resources that have become successful through the mindset, willpower, and ingenuity of their people. The esteemed Estonian statesman Lennart Meri had any number of sayings, but one of his most memorable was “The situation may be shit, but it’s our fertiliser for the future.” With fertiliser aplenty these days, we would all do well to carry the same mindset.