E-Estonia: How It Become a Digital Hub

Business | 01.02.2022
3 minut(es) read
The Republic of Estonia is a small country with a total population of 1.3 million people located in Northern Europe. In the last thirty or so years, Estonia has managed to build the first digital economy and society and nowadays is sometimes even called E-Estonia.

How Was E-Estonia Built? 

In 1991, Estonia retrieved its independence and started to think about its new policy. First, the country had to recover from being regimented under the USSR and gain enough economic strengths to enter the EU. Therefore, one of the proposals for future development was to focus on the IT sector. 

They backed this idea with the following laws and regulations. In 1994, Estonia initiated the Principles of Estonian Information Policy. It described the intention to resolve political uncertainties with IT solutions and showed the main direction of Estonian political thinking towards future digitalization.

E-Estonia: How It Become a Digital Hub

In 1996, the Estonian government issued the first draft of the Tiger Leap Initiative aimed at growing the tech community. This document was further ratified and proceeded in places via IT education that has been provided at schools.  

The same year, 1996, Estonia announced its goal for creating online banking, which was supposed to provide banking access to rural areas. 

It’s also worth noting that online global banking growth happened much later, and it is only now the world is transitioning to digital banking everywhere.

Further on, Estonia added new initiatives that allowed the IT sector to further develop the country. These laws and government support were aimed at a positive environment for IT tech to grow. At the same time, the local government and citizens incrementally implemented new software tools into their day-to-day lives. 

Digital Miracles of Estonia

E-Estonia: How It Become a Digital Hub

Today. Estonia is a country with digital IDs. All the administrative matters are arranged online. The digitalization of society is probably better than anywhere else in the world. Elections also take place online. Furthermore, bureaucracy doesn’t take long in the country either for that matter. All official paperwork is done online and delivered the same way to you. It makes all the processes simpler, faster and comfortable.

Estonia initiated and created a positive, innovative climate for startups, bringing many talented developers and entrepreneurs. Moreover, you can apply for company residency from abroad and get it within a few minutes. You can still work from your home country for the company you own in Estonia.

By designing this space in their territory, Estonia gained global recognition of all different startups willing to register and build their businesses in this country. So far, Estonia has become the homeland of seven unicorns, which are Skype, Playtech, TransferWise, Bolt, Pipedrive, Zego and ID.me. As of August 2021, there were 1216 startups in Estonia, and we can only guess which one of them is the closest to the eight unicorns brought up by this country now. 

The economic impact of this industry is reflected in a turnover of 558 MLN EURO in the first half of 2021. In Europe, the Republic of Estonia is the first country with startups per capita followed by Ireland and Denmark. Most of the revenue of the country is due to startup and digital businesses. 

Crypto and Blockchain Adoption

E-Estonia: How It Become a Digital Hub

Estonia was one of the first countries to officially adopt blockchain and crypto. Its laws welcomed crypto business-related projects, which also fostered the development of this industry.

Crypto licenses obtained in Estonia allow you to manage payments and other operations in crypto, and by registering your business there, you gain legal status. As crypto is still not recognized by many countries and in some is fully restricted, startups working on blockchain or crypto solutions are often driven to Estonia. 

Estonian achievements in software solutions and startup building are impressive and we all can learn something from their experience. Its way of development proves that progress can be made in a short time with the right policymakers in place and quick decision processes. Of course, this is harder for large countries with larger bureaucratic procedures. However, this is certain that openness to innovations is highly beneficial for both the country and its citizens.

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