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Why Digital Citizenship could change Europe

October 19, 2016

Governments are not traditionally renowned for a ‘go ahead’ attitude to delivering services, often until the time when the cost of delivery becomes prohibitive and it drives innovation out of necessity. However, in the Republic of Estonia, sitting in Europe on the edge of the Baltic Sea, a completely different approach has been taken to providing Government services, which has put the user’s wishes at the heart of making the process easier. It is now setting a new standard in the use of digital and its e-residency idea is catching the attention of many countries far removed from the Baltics. It also highlights a number of issues that will resonate for many businesses.

Until the early 1990s, Estonia was part of the Soviet Republic and there was limited use of technology in Government. However, in the last few decades it has embraced online services in a way that few others have. ‘Going paperless’ wherever possible became a mantra long before it was fashionable in other parts of Europe. There was significant investment in countrywide wifi, fibre optic cables were laid and the stated aim was to provide everything possible online. This includes each person having an ID card that enables them to interact with Government over the Internet, using digital signatures. Anyone, anywhere in the world, can become an e-resident and then they can set up a company in Estonia, register with a bank, start trading or pay taxes. The aim is to reduce bureaucracy and make everything as simple as possible. A tax return, for example, takes minutes rather than hours, although it does help that Estonia also embraced simplified processes and regulations alongside its digital path.

An e-resident has control over their data. Only they can see all the data that is held about them, with each Government service only permitted to view that which is relevant to their requirements. E-citizens have the right to have any data removed from the system. Clearly concerns have been raised about cyber-security and the fear of hacking into such a confidential database, but the latest techniques are engaged to minimise the risks with end-to-end processes and the ability to move the whole system to a back-up system if needed. As an adviser to the Government told a packed audience in Tallin recently: ‘If you have good brakes, you can go really fast’.

There is much for business to learn from the Estonian approach. As a client or customer centric approach, the Estonian principle of ‘ask only once’ is a compelling way to consider collating client data. They see their country’s Government services as just that – a service – which should not require the user to repeat information or send back multiple versions of similar forms. They are about reducing bureaucracy for the end user and a person has the right to refuse to provide information that has already been submitted elsewhere.

But of course what is really interesting is what happens when the e-resident reaches a border and has to cope with the swift Estonian approach rubbing up against a more old-fashioned mindset. It’s no surprise to see that this is still a problem area. Many neighbouring countries, such as Finland, are exploring using the same technology as Estonia. However, what about the multitude of other countries that one might want to trade with? The system is set up to be accommodating to working with other countries and a few European Governments are in discussions but seamless transactions across borders are still not a reality. So for now, Estonia remains a fascinating and singular example of taking the pain out of dealing with Government.

Written by Francesca Lagerberg, Grant Thornton.

The views expressed are those of the author and not necessarily of SAMI Consulting.

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