Why The EU Should Look To Estonia To Achieve Its Vision For A Digital Europe

by Ayesha Bhatti 

April 17, 2024

Estonia achieved full independence in 1991, when a referendum declared the termination of the illegal Soviet occupation. In subsequent years, this country of only around 1.3 million people has made incredible headway in its digital transformation, cultivating a pro-innovation environment that has resulted in the output of ten $1 billion tech companies. This includes unicorns like the videoconferencing company Skype and the ride-sharing Uber-competitor Bolt. There is also ID.me, a digital ID company with an Estonian Chief Technology Officer which was recently valued at between $1.4 and $1.6 billion. Estonia is a trailblazer within the EU, with the World Economic Forum labelling it “the most entrepreneurial country in Europe”, and its path to a digital world establishes guidelines for how the rest of Europe should embrace technological innovation.

From Soviet Communism to Pro-Free Market

Following independence, Estonian resources were largely depleted, leaving the country with the big task of kickstarting its economy. In fact, by 1993, inflation was at 90 percent. To tackle this, it took the leap into capitalism by adopting pro-free market policies to liberalise trade, let natural market competition dictate interest rates, and open itself to the Western world. Mort Laar, Estonia’s Prime Minister from 1992 to 1994 and again from 1999 to 2002, led this reform, bringing a fast reformer view welcomed by Estonians dealing with the fallout of the slow-moving false promise of the Soviets. Laar was later recorded attributing the drive of this quick start “shock therapy” of the Estonian economy to Margaret Thatcher’s own “just do it” attitude, marking the first steps towards its digital renaissance. Taking this approach meant that as early as 1995, inflation dropped by 68 percent to 29 percent, and 10,000 new companies had been established, introducing the wave of start-up culture that Estonians are familiar with today.

Building From The Ground Up

This quick reform attitude, coupled with a largely blank canvas to work from, presented a unique opportunity to drive tech growth, spearheading Estonia’s assertion of freedom and pursuit of digital rights. This began with the first draft of the Principles of Estonian Information Policy in 1994, allowing for the allocation of a percentage of GDP specifically for information technology. This policy was subsequently adopted by Parliament in 1998 and led to the transformation of public services to increase efficiency. As public services became more accessible, it laid the groundwork for the introduction of other services, such as the transition to e-banking that ultimately led to the infamous e-ID, a digital ID that creates seamless digital experiences for Estonian citizens. The e-ID is issued upon birth and reduces the number of identity checks required to access private and public resources.

As of February 2024, the government has issued approximately 1.4 million ID cards, in part because the push for digitalisation focused more on the collective advantages it would bring rather than the associative privacy concerns of sharing personal data with government. Even more so, this latter point was later addressed during the development process of the digital ID, opting for a forwarding thinking decentralised system, and opportunities for individuals to view who has accessed their data, and why.

The success of the e-ID shows why ranking pro-collectivism over pro-individualism leads to better long-term societal well-being. One study published by the National Bureau of Economic Research found that Europe’s aggressive privacy agenda is killing app innovation, showing a correlation between the introduction of the General Data Protection Regulation (GDPR) in 2018 and the exit of around one-third of available apps from the EU. The study concluded that factors reducing entry costs into Europe deliver large welfare benefits. Estonia’s free market approach from the early 90s clearly demonstrates that it is possible to better balance the risks and opportunity from new technology.

Similarly, Estonia is known for X-Road and the derived X-tee instance, a distributed data exchange layer acting as the backbone of Estonia’s digital infrastructure that assists with national integration and reduces data leaks from unsecured databases. X-Road is a free and open-source technology that facilitates data transfers between the public and private sector. It streamlines data exchange processes, enhances security, and facilitates interoperability, enabling organisations to derive greater value from their data assets. Because of X-Road, 99 percent of public services are accessible online 24/7. Estonia first began development of its X-Road framework in 2001. By contrast, the new European Data Act, which seeks to achieve a similar goal as X-Road of data accessibility, interoperability, and data-driven innovation, was introduced in 2022, showing how future-forward Estonia’s policymakers were to bet on open data exchange.

An Economy Fit For The Digital Age

At the start of its digital journey, Estonia had a GDP per capita of $3,134. By 2022, it had a GDP per capita of $28,247. This represents an over 800 percent increase in under 30 years. Of course, this figure comes with certain caveats, including Estonia’s much smaller starting point compared to other EU countries, and the fact that Estonia’s digital transformation is not entirely responsible for its economic growth. It does, however, make a strong case for how embracing technology can build an economy fit for the digital age.

Estonia’s success comes from a combination of forward thinkers, open-minded citizenry, and proactively embracing the future whilst still paying attention to present-day concerns. It is why Estonia has garnered the title of “the most advanced digital society in the world.” The current EU mandate is poised to disrupt its wider ambitions of a digital Europe, with recent regulations including the Artificial Intelligence Act, the Digital Markets Act, and the Digital Services Act curtailing technological innovation in the same way GDPR did, through an increasingly complex regulatory framework creating high barriers for entry. European policymakers would do well to embrace the same ideas underpinning Estonia’s own digital transformation, facilitating global innovation to support its citizens, and making policy that treats technology as an enabler, not an inhibitor.

Photo by Nikola Johnny Mirkovic on Unsplash.

Editor’s Note: We updated this article on April 25, 2024 to include additional information about X-Road and X-tee.

Resorce: Center of data of information

How Estonia, the PISA leader, is solving the shortage of ICT specialists

May 5, 2024 by Laura Põldma

As digitalisation has reshaped economies worldwide, it has also resulted in a shortage of skilled ICT specialists. However, Estonia – the country ranking 1st in Europe in OECD’s international survey PISA – has yielded excellent results in resolving the shortage with the right educational policies in place.

Estonia’s success derives from comprehensive strategies that spark young people’s interest in IT education and enable lifelong ICT retraining in society. The country’s success has set an example for many other countries.

Starting from an early age

To attract more young people to ICT fields and introduce them to future possibilities in the area, Estonia launched a programme called ProgeTiger in 2012. The programme encourages preschool, general, and vocational education teachers to use technology – including programming and robotics – more widely in their teaching. „In 9 years we have reached a point where 99% of Estonian kindergartens and 98% of comprehensive schools have taken part in ProgeTiger’s activities in one way or another,“ reports Kristi Salum, the Program Manager at ProgeTiger. However, she points out that it does not mean that 99% of kids are participating in the program; rather, it marks that most institutions have created a chance to learn ICT. Moreover, the learning processes are always adjusted to the age of the children. “If we give children at an early age the knowledge and skills to understand, use and create technology themselves, they will be much more prepared for the future,“ Salum says. She also explains that starting with ICT education at such an early age has made education professionals think more about future education. „When kids start to learn IT at such a young age, we also have to think about what our education system has to offer them at the higher education level,“ explains Salum, bringing up discussions with universities.

Unique collaboration

For a long time, it has been a common understanding in many countries that governments are solely responsible for providing education. Signe Ambre, the Program Manager of a governmental initiative called IT Academy, explains that it is thus a challenge of its own to determine whether the ICT graduates meet the expectations of employers. Estonia has once again found an innovative solution by asking employers to contribute to shaping education. „The programme is one of a kind. Together with all the parties, we have set collective objectives that consider the needs of entrepreneurs and state on the one hand, and the abilities of the universities and vocational education institutions on the other,“ Ambre states. The results are excellent, as according to Ambre, every ninth student chooses to study ICT at the bachelor’s and applied higher education level, which she confirms to be optimal. Moreover, the share of those who choose ICT at the master’s level has grown even faster in the last 10 years: every seventh student who enters master’s studies chooses to study ICT and become ICT specialists.

Women in ICT

A well-known concern in the ICT sector is the high gender disparity, as sector young women are less likely to continue their academic path in IT or choose their career than men. According to Robert Lippin, the Deputy Secretary General responsible for secondary and adult education at the Ministry of Education and Research, roughly there are 3 men for every woman in the ICT sector. This pattern is not only perceived in Estonia but in other countries as well. Both state and non-profit organisations have decided on a collective goal to increase the number of women in tech. Several companies have additionally set up their own internal events, meet-ups, and conferences for women in IT. One of the most unique initiatives is the Unicorn Squad movement, which offers girls aged 8-12 an opportunity to participate in different hands-on activities to learn more about robotics and tech. Today, the club has more than 1600 members, more than 250 mentors, and approximately 130 clubs around Estonia – giving hope that inspiring education and training could be a game-changer. Lippin comments that 40% of students in master’s studies are women, ranking Estonia first in Europe for the share of women in master’s programmes. At the bachelor’s level, Estonia ranks fourth in the percentage of women. Highly active and successful women entrepreneurs have played a major role in introducing girls to ICT, setting a good example for young people.

Lifelong learning

„High demand for ICT specialists and the positive image that opportunities available in the field have created interest in people from various other areas as well,“ Lippin reveals. The interest in lifelong learning has inspired the creation of more opportunities for those interested. For example, short intensive courses such as Vali-IT (Choose IT) for learning basic ICT skills have been created. Many companies that are ready to offer further education to those interested, contribute to these programmes as well. ICT has also become integral to other sectors and transformed how they work. For example, Estonia’s biggest university, the University of Tartu, has even launched an Information Technology master’s program – “IT for non-experts”,” Lippin describes.

The article was originally published on the Education Estonia website. 

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Resource: e-estonia

10 things to keep in mind when starting to build an EdTech startup

May 15, 2024

by Märt Aro

Thousands of educational challenges can be solved with the help of technology – with an EdTech startup. You might have an excellent idea of how to solve one or more of those challenges. To support you, here is some of the most common advice experienced founders give new founders.

1. Don’t start building before you have feedback from your target audience that they would be willing to use/pay for such a tool you have in mind building. Yes, make a nice presentation/mockup, and get honest feedback. Try to make pre-agreements already.
2. Keep focus. If you are building your first EdTech startup, try to build as narrow-scope MVP (minimum viable product) as possible and scale this. Building-wide products are much harder, and going this way, there is a bigger risk that you / your team will run out of steam before getting to enough customers to sustain your team providing a high-quality service.
3. Don’t stay in the vicious cycle of “need to build this one more feature for success”. Often it isn’t true. Nordic startups continue building but forget to set up appropriate marketing/sales. But guess what, it doesn’t matter how much you build if nobody knows about your amazing product.
4. More than 50% of the world runs on 2G internet speeds and more than 50% of internet users globally are accessing it via Mobile. Let that sink in.
5. Choose a major language that is likely understood by your target audience as the base language of your system, so if you are doing updates in the system and lose a translation file, users will still be able to figure out how they can use your system.
6. Build international from the beginning. It’s OK to take a first test in one (small) country, but each country has its own specifics. Better consider them in your architecture. Otherwise, you might have a significant headache when crossing country borders as you have “built yourself stuck” in the country.
7. Business model wise. Ideally, the end user can:a) identify that your product is suitable for them,b) make the decision on their own that they benefit from your product and take it into use andc) be the budget holder (read: pay for the product for themselves without major headache).The easiest way to achieve that is by developing “microservices” instead of wide vertical services.
   There are many alternatives: your end user can identify that the product is good but needs to involve other people to decide on implementing your product; needs to involve others to implement your product; somebody else pays for the product. Those alternatives may also work but can be a headache for scaling.
8. Your product is not strategically critical.If you are a startup, it can be very difficult to prove that you are worthy of the trust of your customers. It’s easier for the customer to make a decision if it adds value but their career/life does not depend on the product.
9. Be aggressive.Building EdTech startup is hard, and there is a lot of noise. If you want to survive in this world, you need to try all doors, windows, and chimneys to get the things moving that you want to get moving. Nobody will lay red carpets for you even if you have the best product for solving a specific problem.
10.  Evidence.As soon as possible, collect as concrete evidence as possible on how much value your solution creates for your customer (e.g. my product makes this: 10x cheaper; 50% faster; 80% students feel happier, etc.). This will make proving that your product is valuable and a successful EdTech startup is much easier.
11. Mind the science.Make sure there is scientific research to back up your education-related claims and aspirations. Be thorough and unbiased; your product could potentially affect a lot of people all over the world.

Resouce: e-estonia

EdTech: Estonian thriving development cooperation

May 13, 2024

by Peeter Vihma

Education in Estonia is free for everyone, and Estonian children have scored in the top positions on PISA tests for years. Combine this with an innovation-driven mindset and autonomy of schools and teachers, and Estonia is an ideal testbed to develop new educational technologies and distribute them beyond our borders. Estonia has recently directed its efforts into development cooperation, and ed-tech plays a central role.

Small but smart 

Being a small state creates unique conditions for cooperation between private and public entities and different branches of the government.

Development cooperation is curated by The Estonian Centre for International Development (ESTDEV). It works closely with Education Technology Estonia (EdTech), an umbrella organisation for technology companies. They cooperate closely with the Ministry of Education of Estonia to better understand Estonian needs and share Estonian know-how more widely than just focusing on technology. This kind of close-knit network is beneficial both domestically and internationally.

“Interest in Estonian expertise is quite big not only among individual countries but also among the World Bank and organisations such as Global Partnership for Education. But since we do not have ample resources, we must think carefully about what expertise we can offer and how to utilise the private sector’s know-how,” says Kristi Kulu, Programme Manager for Education at ESTDEV.

“So, instead of flooding them with resources, we think with the recipient countries about their needs and the steps to achieve them. We want our projects to solve real problems in recipient countries.”

One of the most important outcomes of this kind of cooperation is the sustainability of development cooperation results and the systematic implementation of technologies. For example, ESTDEV led the building of a kindergarten in Ukraine and then supported the capacity building of the teachers. This included introducing the well-used Estonian-made teacher-parent digital interface Eliis. Instead of using it in just one kindergarten, thanks to cooperation with local authorities, it has been implemented in 16 kindergartens in Ukraine.

Support for teachers is the key to success domestically and abroad

According to a recent survey, at least 75% of Estonian teachers use digital tools. Besides Elliis, which is used in most kindergartens, among the most widespread are eKool, a platform through which students, teachers and parents communicate, and Opiq, a cloud-based learning environment.

“We see two drivers for implementing new technologies in education,” says Sabina Sägi, Head of research cooperation at EdTech Estonia.

“The demand comes from the children. They are well versed with technology and recognise that digital skills are necessary for getting a good job.”

“But the immediate driver for supply is the support that EdTech offers teachers. With so many technological solutions on offer, this makes the difference. Even the best gadgets will gather dust without proper and continuous schooling.”

Similar tendencies are visible also globally. According to Ms Kulu, the most successful projects are the ones which have a high-level framework and address the educational system as a whole.

For example, the history of cooperation between Estonia and Kenya dates back many years and is formalised in an agreement between the two countries’ ministries. This has allowed us to focus on harnessing Estonian know-how in the context of reforming the Kenyan education system.

“We are addressing the teacher’s competencies on many levels, from cooperation between universities to exchanging talented IT students to implementing specific software,” says Ms Kulu.

Specifically, in the Digital Explorers talent exchange program, 10 out of 20 Kenyan talents in Estonia are interning in education technology companies.

Success stories in Kenya

Cooperation between Estonia and Kenya is visible on many levels. For example, 60 school directors recently visited Estonia to see how technologies are used in the classroom. In April 2024, an Estonian trade mission to Kenya focused on intelligent solutions for education innovation.

Regarding specific ed-tech solutions, two of our most successful ones in Kenya are the Opiq, as mentioned above, a cloud-based learning environment, and Triumf.Health, a mobile game promoting children’s mental health and socioemotional learning.

Cloud-based learning in Kenyan schools

Founded in 2014 in Estonia, Opiq offers digital study materials and a learning environment that facilitates teachers’ work. Its success in Kenya is notable, given its size and cultural heterogeneity. Today, Opiq contains fully digital textbooks from Kenya’s leading educational publishers and hosts over 120 study kits. Opiq even has its headquarters in Kenya to ensure the environment is constantly developed and improved.

According to Antti Rammo, CEO of Star Cloud and the developer of Opiq, the main challenge in expanding to Kenya was finding the initial partners.

“The Estonian honorary consul, with an impressive network, significantly contributed to finding partners. The development cooperation project initiated by the Ministry of Foreign Affairs also played a key role. Once initial relationships were established, identifying potential partners in Kenya was not difficult,” says Mr Rammo.

Addressing mental health in the education system

Another internationally recognised technology, Triumf Health, has been targeting the mental health of children aged 7-12 through severe evidence-based gaming in the context of education. In their subscription-based game environment, children are guided through a fun journey through Triumfland to empower them and teach them skills to build mental resilience.

Recognising their evidence-based method, Triumf Health was the world’s best tech in the health and wellbeing category in 2022 at the UN World Summit Award.

“The need for mental health support has grown, and we have shown that technology can relieve the problem,” says Dr. Kadri Haljas, CEO and founder of Triumf Health.

“But when we leave mental health issues to the medical system and don’t deal with them at schools or home, we are mostly focused on dealing with consequences. I am therefore pleased to see that countries all over the world are waking up to the fact that mental health needs to be addressed within the education system”

These are just two examples of successful development cooperation results. Although small, digital technologies allow Estonia to contribute to education worldwide well above its weight.

Resouce: e-estonia.com