## E-stonia Takes Off

## Source details

**Canonical URL:** [E-stonia Takes Off](https://www.imf.org/-/media/files/publications/fandd/article/2018/march/trenches.pdf)

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- [Markdown version](/-/media/files/publications/fandd/article/2018/march/trenches.pdf.md)
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### Digital transformation: scope and features
- Estonia has 1.3 million citizens and "virtually all government services and a growing number of private sector services are offered online via its snappy e-Estonia.com state portal."
- Only three government transactions require physical presence: getting married, the sale of real estate, and divorce.
- Core digital services mentioned: one-click tax filing, i-voting, electronic medical records, digital prescriptions, and e-Residency for nonresidents.
- Children learn coding from the age of seven and school curricula include a "Technology and Innovation" theme.
- Estonia’s e-Residency program enables nonresidents to set up companies digitally within the European Union and "pay taxes in Estonia."
- Technology outcomes cited: security services can determine locations of accident victims more effectively and police work has become "50 times more efficient."

### Technology, architecture, and security
- Estonia uses a distributed data exchange layer with no central databases; access is through a "highly encrypted end-to-end, two-factor authorization system" tied to a secure digital identity (ID card).
- Data are "stored; they’re not sharing it." Access is permitted only to authorized persons and "every time someone accesses the data, the system flags it."
- The system’s integrity rests on trust and institutional restraints: "even in the most horrendous of crimes, the government of Estonia would not go into your private data because there is full recognition on the part of the government that, if the system were ever to be compromised, it would fall flat and collapse."

### Adoption, social impacts, and labor market
- Digitalization has been in place for 25 years; a 50-year-old today would have been 25 when it started—mitigating technology overwhelm for older cohorts.
- Employment context: Estonia has a 4.4 percent unemployment rate, described as "almost full employment."
- Public acceptance reasons: convenience, greater security of electronic records versus paper, and the ability to still opt for paper if desired.

### Cross-border integration and scaling
- Estonia has pursued linking digital services across borders as part of EU policy aims—"to get the EU to move in the direction of creating the legal framework" for digital services and data.
- Example of cross-border integration: Finland has adopted Estonia’s digital prescription platform; Estonia receives "8 million visits from Finland each year," and starting this summer Finns visiting Estonia can obtain prescription refills by calling their Finnish doctor and using Estonian pharmacies.
- The Estonia experience is presented as a model for expanding digital service interoperability across Europe, subject to legal and regulatory alignment.

### Policy lessons and prerequisites
- Key enablers emphasized: political will, policy, and laws and regulations—in that order. "It’s not the technology. It’s political will, policy, laws and regulations, in that order."
- Steps for implementation suggested implicitly by Estonia’s example:
  - Define digital identity in law.
  - Establish regulations to avoid abuses.
  - Build a distributed, auditable access architecture (no central databases; logged accesses).
  - Promote digital skills from early education (children learn to program starting at age seven).

### Notable quotes and assertions
- "People didn’t really object because it’s highly secure."
- "We don’t have any central databases."
- "Ultimately it is all based on trust."
- "We just took it one step further." (on virtualizing businesses via e-Residency)
- "I keep stressing it’s not the technology."

*Source: interview and profile text from the PDF chapter "trenches."*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2018/march/trenches.pdf_