Julia is the founder and chief supervisor of European Business Association in Taiwan and head of the Estonian office. Her main responsibilities are to actively promote bilateral commercial exchange between Estonia and Taiwan to establish economic and commercial cooperation. She strongly supports the Estonian e-Residency project and hosts the Estonian consular mission to Taiwan. By providing Estonia’s experience and expertise, she is committed to assisting Taiwan’s digitalization and e-government development.
Translated by: Wordcorp
Estonia has almost become a buzzword in the past couple of years when it comes to startups, innovations and technology. Estonia's “gift to the world” - the e-Residency programme, has become the major topic of conversation among entrepreneurs, digital nomads and simply people who keep their fingers on the pulse.
Estonia is a North European country with the population of just 1.3 million people. In June 2016, Forbes named it “the tiny European country that became a global leader in digital government” and World Economic Forum called it “Europe’s most entrepreneurial country” in May 2017. Indeed, in Estonia all things are digital. Citizens can file taxes, get prescriptions and even vote from the comfort of their own home.
It all started in 1991, when Estonia regained independence and was left with nothing but a strong will to succeed. Being one smart brave nation, it decided to put it all on the Internet and launched a project called Tiger Leap (in 1996) that brought computers and computer literacy to all schools in Estonia thus investing into a generation of IT geniuses. Technology-savvy skills lead to a sustainable and healthy lifecycle of IT industry. Private sector picked up creating hightech solutions. In 1996, first Internet banks were available to public and a few years later it was possible to file taxes electronically. Citizens quickly adopted the new e-tax system since it considerably shortened the tax return period from a few months to a few weeks. 95% of all the declarations are filed now electronically.
The breakthrough happened in 2001, when X-Road was introduced. It’s an open and decentralized system that links together various services and databases allowing them to interact and add on limitless e-services invisibly, quickly and securely. (Insert picture here: the X-Road) For the citizens to access the X-Road, a national ID card was introduced in 2002. By far, Estonia has the most highly-developed national ID card system in the world. It can be used for identification, travel within EU, accessing government databases but most importantly, for digital signatures. A digital signature has the same legal consequences as a hand-written signature.
Thanks to digitalization, bureaucracy and corruption have dramatically decreased giving way to innovations, creativity and progress - a perfect environment for the birth of such startups as Skype, followed by numerous others like Transferwise, Pipedrive, Taxify, Starship, etc.
According to Global Startup Ecosystem Report 2017 by Startup Genome LLC, Estonian startup ecosystem value is $1.5 bn, whereas the global median is $4.1 bn. Early-stage funding per startup is $272k which is slightly higher than the global average of $252k. These are high numbers for a country with GDP of just $23 bn that is more than ten times lower than the global average.
Regarding total funding, Estonia has been outperforming other regions reaching its maximum in 2015. However, in the past two years, the rest of Europe has been attracting more funding, and the reason to it could lie in the shortage of skilled labor. Recognizing this problem, Estonia launched a Startup Visa program that makes it easier for non-EU workers to live and work in Estonia. In the first half a year of the programme, more than 150 applications were submitted.
Estonia is known to be run like a startup - taking innovative decisions fast and adapting laws to them whenever possible. For a small country, it is necessary to think big. Setting up the Estonian Entrepreneurship Strategy 2014-2020, former Minister of Economic Affairs and Communications, Juhan Parts, promised to make Estonia “one of the best countries in the world to establish and develop a company”. So far, Estonia has been fulfilling this promise by providing e-Residency to every citizen of the world. E-Residency is a government issued digital identity that gives an opportunity to open and run a trusted company online. By the end of 2017, over 27,000 e-residents have received the cards and over 4.000 companies have been established. Moreover, recently e-Residency team has announced the possibility of launching Estonian own digital currency “Estcoin” that has been warmly welcomed by the e-resident community.
Estonia is a great example of a country going fully digital and creating innovative services for citizens (and foreigners) before they know they need them. Taiwan, in a way, is very similar to Estonia in its size (geographically), historical strive for freedom and openness to new things. What it lacks is a little courage and close cooperation between the public and private sectors.
Digitalization and digital transformation are happening at an exponential rate. It’s not anymore a question whether it will happen but when. Taiwan should embrace new technologies and follow the example of Estonia in its attempt to digitalize the governance or create its own system.
Security here is of utmost importance. However, the fear of not being able to provide it shouldn’t be the main obstacle. Recently Estonian e-residency program faced a security threat that hadn’t been accounted in before and had to be dealt with post factum. Nevertheless, the solution was found and important lessons learned. Be ready to deal with consequences and take preventive measures as much as possible and to the best of your knowledge rather than avoid taking decisions in anticipation of a failure.
Moving forward and accepting challenges that come with it is the only way to get aboard this digital transformation train be it following Estonia’s example or setting up your own path. Taiwan has gone a long way and needs just a little more courage to emerge as another great startup destination. Jia you!