Digitization in Emerging Markets
From Estonia to Asia and Latin America, the Emerging Markets are the world’s growth machine. But many investors still hesitate to take the step into supposedly “foreign” markets.
Estonia is proud of its reputation as a digital state. And even more proud of its pragmatic approach to digitization. As a matter of course, the Estonians started a state-sponsored hackathon during the Corona crisis. “HACK THE CRISIS” is a prime example of how a digital state can rely on start-ups.
The medieval facades give a somewhat misleading impression: Tallinn is a high-tech city where Estonian coders are developing own apps to combat the Coronavirus crisis. © Getty
freelance journalist reporting on technology, human rights and foreign affairs for WIRED, BBC News, The Guardian and more.
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When Violaine Champetier de Ribes first visited Estonia – known as one the world’s first digital societies – she was expecting a futuristic city to fit the title. “You’re expecting a spaceship and instead, the first thing you see when you get to [the capital] Tallinn is a medieval old town, like Game of Thrones.” Thirty trips to the country later, the French writer says Estonia’s technostate is largely invisible; obscured by the narrow spires and red roofs that punctuate this Baltic nation.
The book she co-authored, The Full Digital Nation, tracks the intricacies of how the ex-Soviet country managed to become a fully functioning online bureaucracy, even in its cash-strapped early days of independence. But now, as countries around the world turn to technology to curb Covid-19’s spread and sustain life under lockdown, a question hovers over Estonia:
Estonia’s coronavirus numbers are generally in keeping with its neighbours. The country recorded its first coronavirus death on March 25 and three months later, the death toll remains below 70. According to Johns Hopkins University, its infection number – at just under 2,000 – is slightly higher than nearby Latvia and Lithuania.
To fight the virus, Estonia has also deployed familiar techniques: lockdown, testing, emptying of intensive care wards and human contact-tracing. But many people in Estonia’s tech community are also proud of how local start-ups were deployed. On March 12, prime minister Jüri Ratas declared a state of emergency. By the next day, a company called Garage48 had kickstarted a state-backed virtual hackathon called “Hack the Crisis”.
Ingrid Rooda – who works for Estonia’s health board – is one state official who was fielding developers’ questions over the two-day event. She describes the atmosphere as fast-paced and competitive. And she points out three “digital solutions” that were created as a result – the KoroonaKaart online information hub, the self-assessment Korooonatest questionnaire, and the national chatbot SUVE, which answers questions about the emergency in Estonian and English.
Estonia’s hackathons have been construed as a lesson in how a digital state provides leadership in a pandemic.
But none of the tools developed in these sessions have been very radical – or even unique. Chatbots, infection maps and self-assessment questionnaires exist in countries around the world – even in those without a reputation for digital government. Bulgaria, for example, which ranks among the lowest EU nations for connectivity, has its own self-assessment app called ViruSafe.
Irja Lutsar, a virology professor who was appointed head of Estonia’s governmental coronavirus scientific advisory board back in March, does not mention any “digital solutions” when she talks about how the country kept its infection rates low. Instead she credits a lower-tech mixture of trust in government and social pressure that meant people were adhering to lockdown orders.
“We are a small country. People know each other,” she explains. “When we had outbreaks in small communities, many people had to be home isolated and if they went to the shop, somebody would say, you shouldn’t be here in the shop, because you should be in isolation.”
Former Estonian information technology minister Kaimar Karu, who was fired in April after a spat with his party, says these so-called “digital solutions” are usually what journalists want to talk about but they might have received too much credit. “I wouldn’t say [the chatbot] is a huge achievement,” he says. “It’s just a reasonable thing which we now use.”
Like the country itself, Estonia’s coronavirus response seems unremarkable because its digital capabilities have been blended into the country’s bureaucracy. The country’s closest answer to a “digital solution” could be considered a low-key information system that enables medical facilities and government officials to share and receive Covid-19 patient data in real-time.
The country’s “once only” policy means citizens should never enter a piece of information into government systems twice. If they enter their date of birth while applying for a driving license, they should not have to enter it again if applying for a loan. The result is that data has to be shared between different government agencies, using a secure system called X-Road (find an introduction here on YouTube).
This data sharing ethos has been extended to the battle against the coronavirus. Erkki Karo, of Tallinn University of Technology, describes how this new system simply required an update to the existing “health information system” which doctors already used to access and share patient medical histories. According to Rooda, this platform enables politicians to receive daily statistics and contact tracers to receive updates about newly diagnosed cases five times a day. “As soon as the laboratory puts in the results, or as soon as a doctor gives a diagnosis, contact tracers can access that information so they can get in touch with people,” she says.
Compared to the flashier “digital solutions” Estonia boasts on its “E-Estonia” website, it is almost disappointing that it was a data-sharing system to enable its success. But Estonians know the secret to efficiency is really rather dull. When the country’s first president Lennart Meri handed over power to his successor in 2001, he marked his decade of success by saying: “Estonia is now a normal, boring country.” The same motto can be applied to the healthcare system which has leveraged the country’s digital state to enable data-sharing.
Estonia’s digital state has also enabled life in the country to continue, largely uninterrupted. Former president Toomas Hendrik Ilves describes Estonia as standing in stark contrast to countries where bureaucracy has been forced to grind to a halt. He points to an example in the US, where 1.7 million passport applications have been delayed. And he adds, not without pride:
“Because we’re so digitised, the pandemic doesn’t affect the operation of governance.”
“Everything proceeds as it always had. [In Estonia], you can do everything online with the government, except for getting married, getting divorced and doing a transfer of property.”
Märten Veskimäe, analyst at the University of Tartu’s Centre of IT Impact Studies, says this has been one of the main benefits of the digital state during this pandemic. “The digital state is important when it comes to the ‘what can you do during lockdown’ question,” he says. “I have heard that the number of digital signatures given during lockdown has doubled in Estonia, which is quite surprising given that it was already widely used before, so people are making use of the tools that are provided to them.”
Estonia’s digital state has been present through its virus response but this has not been a flashy effort of digital solutionism. Estonians are proud of their pragmatism and their experience with technology means they knew their famed digital state could only play a supporting role in this pandemic. “It’s not about tech solutions [alone],” says Karo. “Instead it’s about innovations in complex established legacy sectors. And this is often political, cultural and takes a long, long time – much longer than the patience of the hackathons.”
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