Estonia, a hub of IT excellence

  • 2009-03-04
  • By TBT Staff

LINK UP: One of the country's headline projects, dubbed Xroad, will allow the nation's databases to communicate with each other.

TALLINN - There is no doubt about it: Estonia is wired. In the past few years, this small Eastern European country has become a world leader in all things IT.
It's expertise in the field has increasingly become a source of pride for Estonia.

It is one of the only spheres that more powerful Western nations turn to the Baltic state for guidance and which Estonia can play the expert to powerhouses such as the United States, NATO and the EU.
The country has deservedly earned a reputation for being on the cutting edge of IT, due in no small part to government initiatives that aim to make the country a leader in e-governance and online services.
The applications already in place are impressive.

"I have to say that I personally cannot remember the last time I got a paper document from another ministry. With the ID card we can sign the document, which is a legal signature… It makes life a whole lot easier," Katrin Pargmae, communications manager with the Estonian Informatics Center, told The Baltic Times.
The Estonian Informatics Center is a government-funded institution tasked with solving IT problems that pop up in the public sector and arranging the state's information systems. It is the main government body in charge of developing and implementing a growing e-government.

The organization is currently working on a number of projects, the most high-profile of which is almost certainly the country's ID cards. So far about one million ID cards have been issued despite the price of cards recently increasing from 150 kroons (9.59 euros) to 250 kroons.
The ID cards have a wide range of applications, and can be used by citizens to do anything from voting to registering their car online. On Feb. 17, the first day that Estonians could file their tax returns, more than 150,000 people submitted their forms online. This is 50 percent more than the tax authority saw on the first day in 2008, when a total of 88 percent of residents filed their taxes on the Internet.
Another impressive project in the works is known as Xroad. Xroad will allow various government databases to communicate with each other.

"Basically, in one country you have many databases. There is no sense in making one big [database], because it is very unsecure. So you have lots of little ones. But how do you make sure that people are not asked for the same data over and over again? These databases have to communicate with each other. That's what Xroad is for," Pargmae said.

These aren't the only applications the Estonian Informatics Center is working on. Some of the other main projects on the table right now include improving the state Web portal 's
Plans are also in place to create a document exchange center, expanding the use of mobile phones for online services, and improving Internet penetration rates.


The list of investors that have helped sponsor the ID card project includes some of the largest companies in the country.
The country's two largest banks, Swedbank Estonia and SEB Eesti Uhispank, and two of the largest telecommunications providers, Elion and EMT, are the key sponsors behind the ID card project. Over the course of the past few years, each of these companies has invested about 60 million kroons in the project.
What's more, e-savvy Estonians have also drawn the attention of some of the world's largest corporations, looking to get a piece of the electronic pie.

"Estonia is a small country with few natural resources and as a result Estonia's greatest asset is its people, their knowledge and technology expertise," Jan Muehlfeit, the Chairman of Microsoft Europe, told Baltic Business News in the run-up to a major CIO conference the company hosted in Lisbon on March 3.
"There is no reason why the knowledge economy Estonia has created cannot continue to thrive and grow. Size is not an obstacle for innovation and as the IT sector continues to grow nationally, these types of technical creativity will have broad appeal to the wider market," he said.

Muehlfeit said Microsoft, which already has invested heavily in improving ICT in schools throughout the country, has been eyeing Estonian development and may be interested in working more closely with the country.
"Estonia today has a vibrant technology base. It boasts a strong and growing technology industry and is a regional and global leader in Internet software, e-government services and other key IT areas. Microsoft is always interested in places where technology and innovation are actively fostered," he said.


"Although an e-country has clear benefits 's savings in time and human resources, and the reduction of corruption 's there are also great risks," Estonian President Toomas Hendrick Ilves said in a presentation at the Institute of European Affairs last year. 
The down side to Estonia's heavy reliance on technology is clear. With so much of governance and daily life dependent on electronic communication and services, the country appears a prime target for belligerent hackers looking to stir up trouble.

This is exactly what happened in 2007, when hackers brought down a number of key government Web sites. Many think the attacks, which largely originated in Russia, were carried out with the blessing of the Kremlin. Estonia now hosts the NATO Cyber Defense Center, one of the alliance's primary hubs for coordinating cyber-defense.
Despite these dangers, authorities maintain that the e-government system is one of the most secure in the world.

In 2006, when the ID card project started to finally become a reality, the government set itself the goal of becoming "the most secure information society in the world by the year 2009."
Pargmae said that the country has achieved this goal.

"Well, right now ID card is the most secure way to authenticate yourself…. So this goal has been achieved, because I do not know of another country that has these in the same way that we do," she said.
What's more, Pargmae said other countries often send delegations to Estonia to study the IT system with the view to using the model for the construction of their own e-government.
"We have lots of [foreign] delegations coming, and once or twice a month we have people coming just to look at things. They can look at our systems 's but it is impossible just to export them without any adaptations. They look at the things and gather ideas about how they can do it," she said.