Imagine you could skip tedious waits in government offices and access almost any public service online. That you could renew your driver's license, register a business, or file your taxes in minutes. That you could interact with your kids' school or even cast a ballot online.

Even for Canada’s digital natives, that might seem like distant dream. But it’s a reality in Estonia.

A lucky accident of history enabled the small Baltic state to embark early on the path to a fully digital society. Estonia’s independence from Moscow in 1991 — and the simultaneous need to reboot its institutions and economy — coincided with the birth of the Internet. As Estonia’s Chief Information Officer, Siim Sikkut, tells it, a group of Estonian visionaries saw an opportunity not only to foster citizens’ ties with the new state but to enable the country to punch above its weight by exploiting one of its greatest resources, a computer-literate populace.

Sikkut spoke about the birth of Estonia’s digital state at the latest RBC Disruptors, held at Montreal’s C2 conference on May 24. The conversation came on the eve of sweeping new European regulations on data protection that may reshape the relationship between citizens, companies and states.

What can Canada learn from a country of 1.3 million people?

It Empowers the Citizen

Sikkut said digitizing citizen-government interactions can strengthen people’s relationship with the state, making it “more beautiful” by taking some of the red tape and frustration out of the experience.

But Estonia’s bold digital experiment can only work if citizens retain trust in the system — a responsibility Estonia’s government takes seriously. That’s why it has put safeguards in place around data access and data privacy. He cited Estonia’s decision to make citizens’ health records — and all information about who has looked at them — transparent.

It Saves Money

Estonia went all-digital in part to drive efficiencies. Sikkut said putting a number on the overall savings is tough, but that the country has been able to quantify the benefits in some spheres. He cited Estonia’s practice of using e-signatures for anything that in other places would require a physical one. The country estimates the resulting savings amount to 2% of Estonia’s GDP — which happens to be how much the country spends on defence.

It Can Ease Trade and Investment

Estonia’s gained global attention for granting something called e-residency: basically, making it easy for non-Europeans to establish a virtual presence from which to conduct business in Estonia and therefore the EU. It’s more than a gimmick. Some 40,000 foreigners have taken up e-residency and are actively contributing to Estonia’s economy by accessing financial services and the like.

It Requires Vigilance

You’d think Estonia’s proximity to Russia would be a concern, given the latter’s reputation for global hacking. But cybercrime from non-state actors is a bigger concern, according to Sikkut. Either way, the country takes cyberthreats seriously, and it’s no accident that NATO’s cybersecurity centre is in Estonia.

Another aspect of the country’s defence is teaching digital hygiene — by making sure citizens are aware of cyberthreats and practice smart online behaviour. That’s baked into the school system (along with learning how to code) at an early age.

It’s a Matter of Balance

Will Europe’s new regulations on data protection drive businesses to jurisdictions with less stringent rules? Sikkut prefers to take a values-based view common in Europe, noting “we don’t want innovation at any price.” That sentiment underscores one of the biggest challenges facing governments and regulators as the world goes digital. People want all the convenience that digitization brings, but they want to be protected from its worst aspects, like loss of privacy and data theft. So far, Estonia believes it has found a balance.

As Senior Vice-President, Office of the CEO, John advises the executive leadership on emerging trends in Canada’s economy, providing insights grounded in his travels across the country and around the world. His work focuses on technological change and innovation, examining how to successfully navigate the new economy so more people can thrive in the age of disruption. Prior to joining RBC, John spent nearly 25 years at the Globe and Mail, where he served as editor-in-chief, editor of Report on Business, and a foreign correspondent in New Delhi, India. Having interviewed a range of prominent world leaders and figures, including Vladimir Putin, Kofi Annan, and Benazir Bhutto, he possesses a deep understanding of national and international affairs. In the community, John serves as a Senior Fellow at the Munk School of Global Affairs, C.D. ‎Howe Institute and is a member of the advisory council for both the Wilson Center’s Canada Institute and the Canadian International Council. John is the author of four books: Out of Poverty, Timbit Nation, and Mass Disruption: Thirty Years on the Front Lines of a Media Revolution and Planet Canada: How Our Expats Are Shaping the Future.

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