The Economist explains: How did Estonia become a leader in technology?
When Estonia regained its independence in 1991, after the collapse of the Soviet Union, less than half its population had a telephone line and its only independent link to the outside world was a Finnish mobile phone concealed in the foreign minister’s garden.
Two decades later, it is a world leader in technology. Estonian geeks developed the code behind Skype and Kazaa (an early file-sharing network). In 2007 it became the first country to allow online voting in a general election. It has among the world’s zippiest broadband speeds and holds the record for start-ups per person. Its 1.3m citizens pay for parking spaces with their mobile phones and have their health records stored in the digital cloud. Filing an annual tax return online, as 95% of Estonians do, takes about five minutes. How did the smallest Baltic state develop such a strong tech culture?
The foundation was laid in 1992 when Mart Laar, Estonia’s prime minister at the time, defibrillated the flat-lining economy. In less than two years his young government (average age: 35) gave Estonia a flat income-tax, free trade, sound money and privatisation. New businesses could be registered smoothly and without delays, an important spur for geeks lying in wait. Feeble infrastructure, a legacy of the Soviet era, meant that the political class began with a clean sheet. When Finland decided to upgrade to digital phone connections, it offered its archaic 1970s analogue telephone-exchange to Estonia for free. Estonia declined the proposal and built a digital system of its own. Similarly, the country went from having no land registry to creating a paperless one. “We just skipped certain things…Mosaic [the first popular web browser] had just come out and everyone was on a level playing field,” recalls Toomas Hendrik Ilves, the president. Not saddled with legacy technology, the country’s young ministers put their faith in the internet.
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