Building a Digital Society: e-Estonia – Key 01 2017

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6 June 2017 | 09:30 - 10:00 | Grand Ballroom, Swissotel, Tallinn, Estonia | video record
Programme overview 2017

Building a Digital Society: e-Estonia

Siim Sikkut is the Government CIO of Estonia, also titled as Deputy Secretary General for IT and Telecom in Ministry of Economic Affairs and Communications. His role is to set the strategy and policies, to launch and steer strategic initiatives for development of digital government and society in Estonia. Siim is one of the founders of Estonia’s groundbreaking e-Residency programme.


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This text is being provided in a rough draft format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.

>> GERT AUVAART: And we will continue shortly with a short intro into the digital development of Estonia, and we have the distinct pleasure to have here the Chief Information Officer of the Government of Estonia, Mr. Siim Sikkut, to address you on this.

May I make one more remark. If there are people in the back, there are seats in the front, waiting for you. Thank you. Siim, you have the floor.

>> SIIM SIKKUT: Good morning. I think you can hear from my voice the reasons why we do everything digital in Estonia, because going out means that you can catch cold. And so, yes, being a Nordic country like we are, the weather can be awful at some times, so bear with me in my voice is shaky these days.

Well, our President did a teaser into many of the things that I'll be talking about this morning, so just basically sharing a bit of the journey, the experience, trying to give you a practical glimpse of the things that we do digitally here, the reasons why we started doing them, and what is next for us.

And it comes down to one single point. In many senses, we try to make the most of digital opportunities. The revolution, you know, that the former speakers were speaking about, and the Internet as such.

But where do we start and why? So weather is one reason. But the other reason is very simple. We are just small. If you're small, but still want to be a full-defense country, defense, welfare, the whole spiel, how do you pull that off? To us the answer has always been that you have to be as efficient as you can, as effective with the resources that you have, be them small or big. So that's why we started experimenting on different fronts and ways and how to make the most of what we have. The little people and economic resources that we have, everything.

And it was also in the back, in the context of our economic policy line through the years, for decades, is that we are fiscally conservative, which means that we have to work with what we can gather. For example, to the public Sector. And we supported experimenting with technology for that reason. And you know what to note? It does work. I'll go to more examples, burr it makes us more efficient as a public Sector, as an economy, and as a whole society. So what was experiments at the start then became a clear strategy that we have today.

And the point that we reached now is that basically almost everything, at least when it comes to at least the Government, almost everything, you can handle yourself on online, except for a few things like high-risk transactions, like getting married, or by buying real estate, technologically we could handle that from a distance, but we want to know that everything that you are doing, you are entering into the transaction.

This is a bill to the Government, which is only a few hundred meters away, two companies sign or are sealing a contract between themselves, they do it digitally because it's more convenient and efficient and easier. It makes life easier.

I'll go through some examples of what does it mean. If you are an Estonia resident, what can you do? The primary area that we have focus on is in the company space. Make it easy to start companies and be in business. So that's why it takes only a few hours to start a company from the point of logging in and when it's up and running. You can start making contracts, bank accounts and the whole thing is we want more business so we make it easier. So we see the number of companies growing.

All the declarations to tax, to statistics, you make it, things we can make easy by providing an option to get them done online. So yes, if you run a company in Estonia, you don't have to venture into an office, you can handle it from wherever you are in the world, get your red tape done and taxes paid, you are good to go on the business. You focus on the business and we made red tape easy for you. And this is really to support the economic growth like that.

Besides that, of course, most of the services concern people in their daily lives, whether entrepreneurs or not. So things like, for example, health. Everybody needs health services. So if you get sick, there are digital ways to help to treat you. Electronic health records, which we have had for ten years, basically, whenever you see a doctor, he or she should have access to quite a big part of your medical history from the past. All with the idea that hopefully this way they don't have to spend as much time redoing the analysis and more sort of history to build on and treat you better and faster. Or medical prescriptions and other things that I don't have to spend as much time just to get my medication from the pharmacy. If I have a chronic condition, many visits to the family practitioner, basically just going to get a paper slip just to go to the pharmacy. I have a chronic condition. I call up my family practitioner, my family doctor, and they issue the prescription online. I just show up at the pharmacy with my ID. I get the medicine.

Again, digitally, we are taking a few steps away from the equation. We made it faster for healthcare to be delivered. Again, efficiency for people, less trips to the doctor's office, but for the whole system as well.

These days we are trying to go much beyond that, going into more personalized health services, trying to incorporate all the data that you have on your whereabouts, in your genes, and so forth, to be really targeted, let's say really efficient in the care that we can provide you whenever you have a need for this.

Another area of course that concerns everybody is education. Again we see the digital tools help us to make sure that education we do deliver is the best that it can be. It's from simple things, transactions, interactions within the system, that can ensure that the education gets to those who need this.

So an example I have here, almost all Estonian students are part of what we call eSchool. Basically, it's a communication platform for parents, teachers, students. A core ingredient of making sure that somebody gets an education is that they have to show up. Okay? Something like that ensures us that people and kids are showing up, that we don't lose them in the setup. Because whenever a kid, my kid is missing school, I get a text. Whenever there is something that -- basically, again, teachers need to find out and communicate with parents, they can do this. So a simple thing like this can assure that the school show-up rates are better, which means that we deliver more education.

And if we add to that all the ways that we use digital materials, and we try to do much more on the front, make the whole curriculum be covered by digital materials, the way that we allow how we bring IT education into all schooling levels starting from the first grades, this helps to be much more powerful on how to embrace digital for the better education.

But it's not just the stuff -- basically, it's a daily thing. We tried to look at making the most of digital in the interactions that people want to have for the sake of Democracy, which are much more rarer, for example, than picking up your kid in school every week.

So every four years, not so often, but every four years, whenever there is a parliamentary vote in Estonia, you can vote online. It's purely a convenience service. You can still vote on paper as well. But the whole point is let's make it accessible so it's not a thing that you have to do, like with the bureaucracy with the Government, but the things that you want to do, like vote, which are digitally available for you. Thus, more available for you in the first place.

2015 we had the last parliamentary elections. We had about a third, 32 percent, of all of the votes come in online from about 140 -- 120 countries around the world. So these votes were not -- possibly had not come in otherwise. Now all these people had a chance to say where is Estonia going? Where is our Democracy going? So, again, availability is much more increased.

It all comes down to yes, there are many aspects that we can talk about, like transparency and so forth, but it comes down to the key ingredient: We started doing this for efficiency and we really have seen efficiency gains out there. The President mentioned about how we say about a workweek, which is equivalent to 2 percent of GDP each year just by signing everything digitally in the whole of economy.

But if we add to that how the police are more efficient on the streets because they have access to realtime databases while they are patrolling, or again in the healthcare sector, having access to the data that we have and providing medical prescriptions and things like these, again, we are more efficient per visit.

If you see that based on all of the digital solutions, it has made our tax collections very, very easy. Now we have the most efficient tax collection in all of the world. These are benefits especially for a small country like we are. So this is a reason why we still keep going. We have seen the benefits, we have seen it can be made to work, and we want to do more on this.

And another outcome, of course -- I have to say this in an audience like this -- another side benefit clearly has been that we see that not just efficiency, but we see direct growth coming from all the initiatives. The more we do digitally as a country and Government, the more we have companies, startups, tech guys and girls in the area, basically, who then based on experience start new companies. Or take the experience and knowhow that they have gained in building things in Estonia now to other countries. And that's a big growth dividend that helps to get our economic engine humming stronger and stronger each week and year.

I'll say a few words about what are really the pillars of making all this happen. So if that was a glimpse into if you say what is e-Estonia all about? Well, what are really the pillars or building blocks for this? And one of them, again what the President told quite a bit about, is that we managed to put in place very early on strong platforms for the whole of Government to use that made digitalization in the whole of Government as well as society much faster and more secure. So platforms like digital entity or electronic ID, basically each Estonian has to have a smart card that gives them access to anything online and a chance to sign anything in the legal and secure way.

Having this digital ID out there meant we could now start moving all different interactions with Government and other entities online. Like I said, only you had to still show up in places where we want to really make sure that you know what you're doing. We want to have extra protection. But yes, whether it's the Prime Minister doing things, whether it's companies doing any type of contract or business deals, or any Government agencies, digital ID allows us to seal all of the things with a valid strong signature, as well as then offer online channels for whatever services are out there. That's really the key to getting stuff done and not having to be physically present in Estonia, which is more powerful. So a platform like this made it faster to move online and also in a way that we still have the trust and we can trust the users if they log-in. At the same time, they can trust us on the other hand.

The other platform that we always talk about is X roads. Again, quite a few of you have heard about this already. But X roads in a nutshell, it's a platform for data exchange across the Government and beyond now. So, for example, if private Sector companies, if they need to submit data, pull data, and if there is a legal basis for that, if they need to submit the pulled data to the Government, they do it via X roads. It's a joint set of standards, protocols, and a bit of technology to then do it in a uniform way.

Now, why is it important? Because usually if you think about any service in a private space or Government space, usually if you want to make it user-friendly, you have to somehow reuse data from different parts of Government, not just within your own agency. There are many ways to do this. You can build up all of the connections one by one, or you could have some sort of a platform. The platform makes it easier because, first of all, you save time. You don't have to reinvent the wheel each time you need to have an integration.

Secondly, if it's a solid foundation for that, it makes all of the connections much more controllable and secure in the sense that there is a certain quality and security always guaranteed per transaction. And that goes a long way to making sure that at the end of the day, the stuff we do is trusted by the people. Because if you don't have the trust, we don't have the users. If you don't have the users, well, there is no way we can run a digital Government or company for that matter.

And that leads me to the point of security, why this has always been so fundamental to the Estonian approach. It's because, again, perhaps we hit a bit of luck that we had really people who were thinking about this from the very start, before it now became the strategy that it now is. But we believed that of course security and privacy has to be carefully taken account for, but, fundamentally, they can be managed.

They don't have to remain barriers for digitalization. If you do manage them, if you do work on them, if you do basically, do our best to mitigate them, then we can still be very strongly digital. But we have to work on them. So that's why we try to design everything that we build securely from the start, using the state-of-the-art technology also for that. That is why we do rely so heavily on digital ID, for example, making sure that all interactions happen safely and securely. That's why there's a common platform like X Roads in place, so that all integrations will happen in a secure way. That's why we even use a block chain type of solution now to provide for data integrity and making sure that nobody tampers with the data. All these things and more we do all the way to creation and data defense, just to have the trust there. Because, again, if we didn't, there is no way we could rely on digital so much as we do. And as we see the benefits that digital gives, we have to make sure that we have the trust there.

And besides then the tech and sort of how to build things in the platforms, of course the other instrument that has been very strongly what we believe in is basiclaly rules and Regulation. Again, often Regulation is seen like a hindrance, like a barrier, something that keeps you from doing stuff. But, in our case, we see that that a powerful legislation can be an enabler, can push us in the right direction.

To give an example, that's why we have now through the years brought in the principle of once only in our legislation. Once only basically means that when one part of Government knows some data about me, the others should not ask again. And the whole idea is that this way I can have a fast and more efficient seamless service from the Government side. I don't have to spend as much time re-entering the data or resubmitting the data that I've done already in the past. The next interaction will be faster, smoother, more efficient. I save time.

So again, this once only, bringing this principle in, that forced the Government agencies to break out of the silos, think beyond the silos. As X Road was really a platform that was there, we had to start making use of it and integrate the whole thing together into a one stop shop type of service mode.

Or another principle that was very clearly relied upon is basically that we are very big fans of open Internet in Estonia. That's why also the whole event here and that's why a long-term commitment to the topic. We don't build our networks. Whatever we do, we build the Internet as such, digital ID fundamental itself relies on the Internet as such. PKI works over the public Internet. Same way, X Road is a way to make sure over the public Internet, transactions can happen, exchange can happen in a secure way, not that we build our own Government networks. And that's, again, an efficiency reason but also fundamentally, because an open Internet, a full Internet is such a big enabler to the all of things that we do. So we better make use of it.

And the last thing in terms of principles, and this is easier said than done, and what we have really benefited from in Estonia is a strong commitment from leadership, both administrative and political, to a digital cause. Like I said, initially we started as experiments. But as experimenting proved their value, we started saving time, money, back office and front office for the people and public Sector alike. Leaders started asking for more, guys, engineers, deliver more of this. Bring us more ideas and solutions on what to build. So that is the thing that ultimately, technology, can take us some ways, right? At the end of the day we have to transform how we do things in our own organisations, be it Government or otherwise, to really make the full benefits of digitalization.

In Estonia, we have had the boldness to try out new things, to experiment, to take risks, it has been there to transform how we do things.

I'll give you a simplistic example. Why our tax system is so efficient here? Well, yes, you can get everything done digitally. Why we started doing this? We could have done a simple thing. We could have simply put the tax forms online, saying go online, fill in all of the blanks, and that would be an online service. But that would be a crappy one.

Rather, we thought let's transform it. What is a tax declaration? What is the process behind? Well, we do actually have all the data. Why do we ask you? Let's pull this data in for you. Let's provide this as a pre-filled declaration. Make it so very easy for you to get your taxes done. And you know what? People love this. That's why they pay their taxes better. That's why they don't have to spend more than three minutes on tax declaration. And tax is not a new thing in Estonia and even many other countries around the world.

But the point is, the principle there is we could have simply automated some way, digitized what used to be the process before. But, instead, we have said we now can consider and rethink how does a Government service work? And through that we got the efficiency gains that we are seeing on a big extent and level. That's the transformation. That's the challenge in front of all of us, in all of our Government, in all of our countries, including still in Estonia.

And the reason I say this is that in Estonia, we don't think we are anywhere near ready. First of all, technology moves ahead all the time. New opportunities open up.

Secondly, there is always so much more to do, because we only scratch the service in terms of transformation happening. Even if something is available online, our thinking now is: Well, why stop there? Let's make all the interactions with the Government disappear instead? Let's automate services away. Because if you think about it, many interactions you have with the Government, they are very simple or actually silly. Take something like applying for a pension, which at least for now everybody hitting a certain age must do. We know that in Estonia there is a 99 point something percent of chance that you will apply for a pension. At the same time, for a majority of people, we have at least most of your employment records, your salary records, already there. And under the once only principle, we should never ask again. So why do you have to apply at all? We have your birth date on records, you can just start getting the money. No hassle, no service, no interaction, but you still get the benefit.

We deliver to you invisibly, proactively in the back end. The same thing -- I mean, this is an example in a silo, the same thing we want to do across life events, with the packages of services involved in the bundle. So if a child is born, we don't need data to figure out the next steps that the parents want to make. Name the child. Again some benefits, kindergarten online, all of these things. You can get it done before you leave the hospital room the next day. I've done it twice myself.

Why do we ask? The Government knows that the child was born, because the hospital makes the entry to the population registry. There is an identity code before they have a name, because they exist. We could start the other way around. Not have you come to us with different applications, just make it one thing and say thank you for the new citizen and future taxpayer. What do you want the name to be and what bank account do you want the money to? The only two bits of information that we really need. And the rest can follow automatically from that.

Or another example that we are building in actual practice, too, immediately is for companies. So what we are doing for companies is that once you have it established, up and running, if you consent, if you agree for us to have access to your financial records, right? Then never ever you have to submit any declaration again. The tax first, and then also the next step for statistics or annual reporting. Basically, you start a company, give us access to the data, we don't bother you ever again with red tape unless you are up to something shady. So you don't need an accountant anymore. For us at least, for micro companies, the bulk of any economy, especially in Estonia, that's a massive efficiency gain that we could deliver them. Again, by making us invisible, the don't have te interaction need, automating the data flow and through that actually delivering a better service for our users.

So that's the kind of digital Government that we want to build. Of course it doesn't have to end just at the Estonian border. We really believe in the digital single markets, and as the President mentioned and many of you know anyway, we are going into the European presidency in just a few weeks from now. Even regardless of the presidency, we always believe that we have to connect the Governments across the borders, because people do move -- you moved here today, right? -- companies move, capital move, foods and services move. But not data. So even if you go to Finland, which is 80 kilometers, 50 miles away, you still have to be part of this, so much paperwork today just to prove that yes, you are legit in Estonia, you paid your taxes, you have your pension insurance, whatever like that. To prove that, you have to get a paper from Estonian authority that you then take to Finland, submit it to the Finnish administration who types or scans it in, digitizes it. Why? Let's just connect the Governments? Let's have the pay connected. And for that, people don't have to bother with the paperwork or the hassle of delivering stuff across the borders.

We could, again, greatly enable the movement of people, companies, the whole single market coming together. And we don't see this just as a dream; we are actually building this. We started with Finland, with whom we happen to be sharing the data exchange platform. So they have X Road in Finland as well. So we have already connected the infrastructures, and now we are in talks, in the process of one by one integrating our databases together, so people and companies don't have to bother with paperworks back and forth. Instead, we can have an automated exchange if there is a need for one Government to know something that the other Government already knows.

And we are happy to extend this, Sweden, other countries involved like that, and make it cross European. This is what we will be on the policy level also pitching and talking a lot about during our presidency. There will be more than 50 events in Estonia alone in the next six months, covering different angles, ideas, legal discussions around this, how to make this happen on the European level. But, again, we are already doing this in practice as well with our neighboring countries. Because we see that's how Governments have to deliver also in our day and age. We have to deliver also across the borders, digitally, not just within ourselves.

And the last note, if the cross-border thing doesn't work out, well, in Estonia, we always have an alternative. We always welcome everybody and anybody to come and just use our services.

On that note, there must be some e-Residents here. Are there any e-Residents? One, really? Three. A few, all right. Good job. You rock, guys. Everybody else, you should go apply.

What an e-residence does and gives is it gives access to the digital services that we have been building up through the years in Estonia. So anybody in the world can apply. We do run a background, so just make sure that you are legitimate. And so the reason is so that you can start a company in Estonia, administer it, do the banking, whatever. The whole point is we want to offer you a chance to have your stuff done in a nice convenient way wherever you are in the world. You don't have to bother by showing up in Estonia just to get your business done.

The reason we started this was simple. We don't make enough babies. I have two. So that's quite a hand load already. But basically, for our economy to grow, one of the ways is that yes, you need more users. With e-Residents we are now expecting more users. And the babies, the become active 20 years down the line at best. E-Residents immediately they are using the services via our companies, via our government, and bringing more money to the economy. We have never been afraid to say we do this for the purpose of growth. Because digitally, even though we have the digital ID and we have the services, we can go faster than we do in the physical world. In that sense, again, we try to make the most of the, really, the opportunities of the Internet as such gives us to be much bigger than we otherwise could be.

On that note, I will end. I'll invite -- yes -- you to make the most of these few days in Tallinn, especially if you are here for the first time. But also for the next stages and next events and years to come, always come back, join us as e-resident, and join us especially at the European level to bring the whole thing together and to live practice. You know, this is the single market sense.

Thank you.

>> GERT AUVAART: Thank you.


>> GERT AUVAART: So thank you, ladies and gentlemen. I hope you enjoyed the pep talk on Estonia or the safe speech, or how should I put it?

This text is being provided in a rough draft format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.