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Estonia has launched Country-as-a-Service (CaaS) to create a true digital society. What will CaaS deliver and how can our government agencies take advantage of it to deliver new efficiencies and opportunities for the NZ public?

If our government is to achieve its goal of radically transforming public services, then we need to look beyond our borders at how other countries are delivering digital services to enhance the lives of their citizens.

 

Our agencies have made great strides to transform government services into a single, coherent system that integrates to meet the needs of citizens, businesses and government. During the last quarter, 52.9% of all transactions measured were completed digitally, and 78% of New Zealanders who used a digital transaction with government rated it as being an easy experience.

 

And while there are issues to resolve with Result 9’s delivery of better public services to businesses, progress is being made.

 

However, when it comes to e-government, one country is way ahead of New Zealand and most of the world – Estonia. In just 20 years, Estonia has become one of the most wired and technologically advanced countries in the world – a true digital society.

 

Its latest initiative to increase the well-being of its people has seen it launch Country-as-a-Service or CaaS. It’s a location-independent, hassle-free and fully digital economic environment for people who do not reside in Estonia but need better everyday solutions than those offered by their own states.

 

So just how did a small country of just 1.3 million people leap-frog the rest of the world? Siim Sikkut, the digital advisor to the Prime Minister of Estonia, visited New Zealand last month to speak at the CIO Summit on Estonia’s achievements and offer advice on how other nations might catch up.

 

He explained that after splitting from the Soviet Union in 1991, Estonia saw the impossibility of physically serving a small population spread across a large region. Both private and public sectors decided to bet on the development of digital solutions and e-services to be more efficient.

 

Estonia now has one of the most developed national digital infrastructures in the world. Its citizens each have an identity card with a unique identifier that allows them to access over 1,000 public services.

 

It’s a country where a digital signature is preferable to a physical one, taxes take only a few minutes to file, and online elections have been held for over a decade. You can register a legally functioning company in 20 minutes, health records are electronic, medical prescriptions are digital, and the education sector shares a single portal on which all stakeholders can collaborate, whether a student, parent, teacher or administrator. It’s no surprise the country is now commonly called “e-Estonia”.

 

Entrepreneurial thinking is a national mindset. Skype was founded in Estonia and it helped kick-start a generation of global entrepreneurs. Estonians now have more start-up businesses per capita than any other nation in Europe.

 

The underlying ethos is the ‘once only’ rule, which means that if the Government already holds information about you, it should not have to ask you a second time. The people own the data and everyone can see who has been accessing their data – and can complain if they see any unauthorised access.

 

All of these digital services are underpinned by X-Road, the national data exchange platform, which allows the e-services databases, both in the public and private sector, to link up and operate in harmony.

 

Amazingly, just 1% of Estonia’s GDP goes on technology and services. Instead of developing a single, all-encompassing central system, Estonia created an open, decentralised system that links together various services and databases. The flexibility provided by this open set-up has allowed new components of the digital society to be easily developed and added through the years.

 

But Estonia’s launch of Country-as-a Service is its most radical project so far.

 

One of the key factors influencing a state’s ability to increase the well-being and wealth of its citizens is the number of customers (people and businesses) that it can generate or attract. States typically maximise the number of customers by promoting population growth, entrepreneurship and immigration.

 

Estonia had little chance of succeeding with those approaches. It’s so far north that people don’t want to physically live there (despite its advanced, high income economy and high living standards).

 

However, the world has seen a massive leap in the number of people who offer their skills and knowledge for sale on the global marketplace irrespective of location and national borders.

 

Estonia decided to take advantage of this opportunity, and aims to create a borderless digital society with 10 million e-residents by 2025.

 

Anyone, no matter where they reside in the world, can become an e-resident of Estonia and get a unique ID that lets them access many of the public and private sector digital services. The country hopes they will eventually set up online companies digitally based in Estonia.

 

The more people and companies that are engaged with the Estonian business environment, the more clients there are for Estonian companies. The more clients Estonian companies gain, the bigger their growth potential and the growth potential of the Estonian economy.

 

CaaS started a year ago, and has gained around 10,000 users so far. It’s still in its infancy and is missing some elements. For example, it’s currently illegal to open a bank account in Estonia long distance due to money-laundering concerns. When the banking issues are worked out, the country plans to promote the concept more heavily.

 

So what are the opportunities for New Zealand?

 

There’s one fundamental difference between our efforts and Estonia’s – the secure digital identity. Siim goes as far to say that if countries don’t issue a secure, government-backed digital identity to all their citizens, they’ll struggle to deliver digital services. He explains that if we don’t put unique identifiers on people, then we can’t connect data.

 

If the New Zealand government cannot issue a secure, government-backed digitalidentity to our citizens, or if we fail to greatly simplify the machinery of bureaucracy and make it location-independent (via initiatives like the RealMe identity verification service), this becomes an opportunity for other countries that can offer such services across borders.

 

Much of what Estonia has achieved was possible because it started with a clean slate. We don’t have that opportunity here in New Zealand, but Siim’s presentation convinced me that our public sector will benefit by focusing on two important areas:

 

1.   Find more ways for agencies to work with the private sector so that you get what you need for citizens, while also helping start-ups and businesses grow. For example, Estonia works on many of its IT projects with the private sector, rather than employing people directly. That makes its government more efficient and saves on costs, while also acting like a government business growth initiative.

 

2.   Develop an enterprise-wide vision for data: When only 50 percent of government managers make even half of their decisions based upon data and analytics, most countries have some way to go in emulating Estonia’s achievements with data-driven government. A data and analytics strategy will ensure that each data project or solution leads to a true enterprise-wide capability that allows us to do future prediction modelling from a “single pane of glass”.

 

Are you thinking about Country-as-a-Service?

 

Country-as-a-Service is the new reality. Just as SaaS has changed the ground rules of industry after industry, Country-as-a-Service could disrupt current debates over immigration – or even what it means to be a nation.

 

If countries start competing with each other over their CaaS offerings, it could create new efficiencies and opportunities. However, it could also exacerbate the gaps between the digital ‘haves’ and the digital ‘have nots’.

 

We’re fortunate that New Zealand is considered a great place to live and work, but we could fall behind if other countries can offer their citizens an even higher standard of living.

 

Let’s grasp the opportunity to learn from Estonia’s achievements to deliver a true digital society for our citizens and businesses.

 

 

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