Estonia is trying to convert the EU to its digital creed

The country of e-residency wonders why others are more sceptical

ESTONIANS are among Europe’s least pious folk. Just 2% of the population attend services weekly in the medieval churches of Tallinn, or anywhere else. A growing number of the inhabitants of this forested, sparsely populated land subscribe to the nature-loving precepts of neo-paganism. But there is only one faith that truly unites Estonians. Broach the subject of digital technology, and you will be amazed by their fervour.

Estonia has carved out a niche as a startup hub and a friendly environment for foreign businesses. Its biggest innovation, however, lies in e-government. Citizens of this tiny Baltic nation can conduct almost every encounter with the state online. A digital-signature system makes official transactions a doddle. Armed with an ID card and a PIN, Estonians can vote, submit applications or sign contracts in seconds. Officials claim this lifts annual GDP by 2% while saving a mound of paperwork and creating opportunities for business. Estonians abroad lament the red tape involved in even simple tasks like applying for a driving licence.

These achievements have made e-government a potent source of soft power for Estonia. Its latest startup is an e-governance academy designed to spread the word, and pilgrimages to Tallinn are now compulsory for governments curious about digitisation. “Is it true that there’s only 1.3m of you? I don’t believe it! You are everywhere,” exclaimed an African emissary on a recent visit. Japan has built an ID system with Estonian help. Its prime minister, Shinzo Abe, is one of over 21,000 foreign “e-residents” of Estonia, all of whom can incorporate businesses in the country without setting foot in it. (The first was one of Charlemagne’s colleagues.) Estonia is aiming for 10m e-residents by 2025. Many of them, it hopes, will be British entrepreneurs otherwise severed from the European Union’s single market by Brexit. “E-residency”, says an official, “is our gift to the world.”

Now, as Estonia assumes the rotating presidency of the EU’s Council of Ministers, it has been granted a pulpit from which to preach the digital gospel to the rest of Europe. As well as managing legislative disputes between the EU’s 28 governments, Estonia will spend the next six months pressing its vision upon the rest of the club, which, it fears, may be left behind by more digitally astute policymakers in other parts of the world. The crowning moment will be a “digital summit” in September, which almost all of the EU’s leaders will attend.

Chief among Estonia’s plans is a proposal to expand the EU’s familiar four freedoms—the unhindered movement of goods, services, capital and people across borders—to include a fifth: data. Data-localisation rules can hinder cross-border trade as effectively as tariffs on goods, or regulations that protect service industries. (The European Commission counts over 50 such laws across the EU.) By one estimate, a fully functional data market could raise the EU’s GDP by about €8bn ($9.1bn) a year. Data-sharing between governments can make life easier for travellers, too. Optimists hope that a pilot programme between Estonia and neighbouring Finland to share medical records, which enables travelling patients to pick up prescriptions in either country, could serve as a prototype. And because Estonia’s platforms are open, businesses can build upon them to provide their own services.

Encountering such grand ideas on a recent trip to Tallinn, Charlemagne was reminded of the tech evangelists of California, his previous posting. Like the dreamers of Palo Alto who see no problem an app cannot fix, Estonians often struggle to understand how anyone could question the benefits of the e-society they have built. “Estonia has a message to the wider world, and particularly to other nations attempting to transfer” to democracy, says Kersti Kaljulaid, Estonia’s president and high priestess of its digital credo. (Her predecessor, Toomas Hendrik Ilves, learned to code at 13 and is now installed in a think-tank at Stanford, Silicon Valley’s favourite university.) It is hard not to be converted.

Will it play in Perugia?

But not everyone shares the vision. In Estonia, a small place with high social trust, few people worry about corruption or infringement of privacy. In other countries they do. The challenge was encapsulated at a dinner Charlemagne attended in Tallinn. On hearing yet another Estonian encomium to the ease of paying taxes online, a Greek colleague said she feared that under such a system at home some jerk in the civil service would spot an anomaly in her data and shake her down for bribes. A German fretted about hackers stealing his files. Governments, too, often refuse to play along. There is always an excuse to lock data inside national borders, notes Andrus Ansip, a former Estonian prime minister now running the European Commission’s digital policy. It starts with national security, continues to public health and soon extends to every area of governance.

“Our experiences are inspiring but definitely not transferable directly,” acknowledges Ms Kaljulaid. To countries seeking to emulate Estonia’s example, she suggests building trust by placing smaller services, such as school applications, online before progressing to weightier matters like e-voting. Done properly, she adds, digitisation can actually enhance security. (Other officials note the potential of blockchain technology to overcome gaps in trust.) But countries must want to change. Mr Ansip says that groups of EU governments may need to move ahead with data-sharing initiatives rather than waiting for all the laggards to agree.

Vested interests and distracted politicians have often limited Europe’s ambitions on digital matters. Having regained their self-confidence, Europe’s leaders are seeking fresh ideas to boost growth. The EU has long paid homage to the potential of the digital economy, and Estonia’s presidency offers them a chance to make this word flesh. “We are on the brink of an ideological shift in the rest of the EU,” says Ms Kaljulaid. With luck, this will turn out to be more than an expression of faith.

This article appeared in the Europe section of the print edition under the headline "The church of data"

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