In Tallinn, the capital of Estonia, the ancient spire of St. Olaf’s Church towers over a walled medieval city of cobblestone streets and buildings dating back 800 years. But behind Estonia’s medieval doors, citizens are accessing one of the most advanced and comprehensive e-government systems in the world, in a country with one of the highest rates of Internet connectivity (at over 75 percent). How did this tiny nation become a digital innovator? After becoming independent from the Soviet Union in 1991, Estonia, with a population of approximately 1.3 million, had to find a way to develop its country and economy. With little in the way of banking, communication, or public-sector infrastructure, the country had room to chart an independent course. The result: a system that allows access to more than 160 online services, including unemployment-benefit applications, filing for parental leave, property registration, notary services, digital medical records, and prescription-drug renewals.
About the authors
Elana Berkowitz and Blaise Warren are consultants in McKinsey's Washington, DC, office.
The Estonian e-government system has two key aspects. First, its data architecture allows agencies and private-sector entities using the system to largely retain their own records instead of combining all of the data on centralized servers. Second, access is provided through a secure, nationwide electronic ID system. Users swipe their physical ID cards through a reader (now preinstalled on all new computers or available for purchase for €3–€4) and then enter their personal ID numbers. Recently, Estonia added mobile access via smartphones.
Those concerned about privacy can opt out of sharing their data online with little difficulty. An Estonian patient’s health records, for example, are by default available for viewing by any doctor. The benefit of this is that doctors can look across people for common conditions and cures, not just within their patient base. But anyone who dis-approves of this default can opt out—preventing one or all doctors from viewing certain medical records, or allowing only their personal doctor to view their records.
Estonia’s e-government platform will almost certainly continue to evolve: Liia Hanni, program director of the E-Governance Academy and a former member of Estonia’s parliament, says, “In Estonia, we can add e- to almost every affair of life.”