The Tiny European Country That Became A Global Leader In Digital Government

The Tiny European Country That Became A Global Leader In Digital Government
Mark Stone
14 JUN 2016

When you think of cities or nations that lead the world in the use of cutting-edge digital technology, Estonia probably is not the first to come to mind. Yet this small Baltic country, once overrun by Nazi Germany, then occupied by the Soviet Union, is using digital technology in ways most governments could only dream of.

Talinn, Estonia

Talinn, Estonia

Estonia turned to digital technology and the internet in an effort to reboot after gaining independence in 1991. By 2002, the government had built a free Wi-Fi network covering a high percentage of its populated areas. Five years later, it introduced e-voting. In 2012, Estonia established a massive fiber-optic cable infrastructure to deliver ultra-high-speed data connections.

Just as impressive, if not more so, is the country’s digital development of governmental systems via an environment called X-Road, which serves as the backbone of its digital services.

Taking The X-Road

The open, decentralized X-Road system enables secure internet-based data exchange among the state’s distinct information systems.

Anna Piperal, managing director of the e-Estonia Showroom, describes X-Road as being simple in design yet complex in functionality. X-Road provides for the secure cryptographic exchange of data by more than 1,000 government institutions, local municipalities and private sector databases, according to Piperal. It also allows Estonians to securely access state databases via the cloud.

There is no single node through which all data pass, Piperal said. All connections are end-to-end. This makes the data resilient under conditions of both high-volume usage and cyberattack, Piperal says. If one node goes down, the rest stay up.

“The system sees over two million monthly queries,” Piperal said. “X-Road has been up since 2001. It has never been down.”

Hands Off The Data

In countries such as the United States, personal data can be found in any number of places — and countless individuals, agencies and institutions can access it. In Estonia, citizens control their data. And they can access it quickly.

“Our citizens love it,” Piperal said. “We are used to this way of living. Waiting is something we’re not used to now.”

An Estonian logs in using an identity card, which includes a readable chip and PIN. He or she is provided with a log of everyone who has accessed his or her data. If patients see that, for instance, doctors other than their own have accessed their medical records, they can — with one click — report it to a data ombudsman. The doctors will have to justify the intrusions to the ombudsman and could face penalties.

Time Savers

The identity cards allow Estonians to digitally sign for just about everything. Last year, 170,000 people voted digitally in a parliamentary election. Handwritten signatures are necessary only to get married and buy real estate.

For businesses, digital signatures can be a huge time saver. A deal that relies on traditional paperwork could take weeks. By contrast, Estonian businesses can complete the process by digitally signing electronic documents with unique PIN codes. (In the European Union, digital and ink signatures are equally valid.) Similarly, Estonians can make bank transfers and perform other legal functions with mobile devices.

This digitalization simplifies tedious tasks such as filing taxes, a process that Estonians complete on average in just three minutes.

In 2014, Estonia launched its e-Residency program, which lets anyone who wants to register an online business in Estonia acquire a transnational version of the country’s ID card. Having obtained this digital identity, an e-resident can administer his or her location-independent business online, as well as access secure digital services, such as document encryption and transmission services.

Data transparency extends to the Estonian government. Draft legislation is available to the public to read online. With details about proposed laws available at every stage of the legislative process, influence from lobbyists is all but eradicated, according to Piperal, who describes it as “parliament gone paperless.” The president signs laws into effect with a digital signature on a tablet computer. The efficiencies this digital revolution makes possible have reduced administrative work from hours to minutes.

Simple… In Theory

This digital infrastructure, along with the underlying cybersecurity measures that facilitate it, provides Estonians with enviable freedom and efficiency. But it is neither groundbreaking nor difficult to implement — at least, in theory.

“The basic principle of a digital society system is trust. If the data were to be breached, then the whole concept would collapse,” Piperal said. “We as citizens know what the Estonian government collects about us. Everything is auditable. And institutions and government cannot manipulate the data once it’s in the blockchain.”

So why can’t other governments and organizations re-create this? There may be multiple reasons.

Replacing systems, laws written for an analog society, legacy technology and super databases is costly. Another huge hurdle is skepticism about the security of digital systems. Even today, the predominant thought about critical information in the cloud is that it’s not secure.

Estonia’s success story suggests that cloud technology is just as secure as the traditional IT environment. Enterprises or governments with apprehensions about trusting their data to the cloud need to recognize that cloud vendors have improved the security of their systems and have qualified IT staff on the job.

But ultimately, the most critical consideration for late adopters is process: how everything will be set up and implemented. In the case of Estonia, systems were set up correctly from day one and have been enhanced from that sturdy foundation.

Governments at all levels in the United States will pursue digital city initiatives, but society “will be slow to embrace such innovations because of the enormous failures in security” that have occurred in the country, such as the breach of systems at the federal Office of Personnel Management, said Albert Gidari, director of privacy at the Center for Internet and Society at Stanford Law School.

“In the end, it is a matter of trust,” he said.

Mark Stone worked in information technology for many years before deciding to make a career out of writing about it. He lives in Canada and also covers entertainment.

 

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