Estonia: a Forerunner in Digitalization

To begin with, we, as a part of today’s community of people, live in a world that is constantly changing. And, generally speaking, the 21st century often related to as the information age or the time in the history of technology. In fact, all kinds of digital technologies put into everyday life. Digitalization affects everything that can be digitized. Making us more and more dependent on technology. Can you imagine the present age without digital technologies and inventions of new things? Having said that, let’s explore the situation in the European Union (EU).

Estonian desi rankings

By Digital Economy and Society Index (DESI) 2017 rankings, countries such as Denmark, Finland, and Sweden have the most advanced digital economies in the EU. The digitalization economy refers to an economy that is based on digital computing technologies. And is possible through the process of digitalization. It is also swiftly developing all over the world. Therefore constantly changing the world as we know it today. Also, DESI used to track the progression of EU member states in digital competitiveness through five linking components. Connectivity, workers, use of the internet, integration of digital technology, digital public services.

The latest statistic shows that in DESI rankings Estonia places in the ninth position overall. Estonia falls behind the Nordic countries said before. As well as other European countries such as the Netherlands, Luxemburg, Belgium, the United Kingdom and Ireland. However, the data also shows us that Estonia is the leading country in the EU in the online put. Into operation of digitalization public services. The focus is mainly based on short for an electronic government. This feature used to measure the success and development of such things as digitization and modernization of public services. That can lead to effectiveness both for the groups of managers and people. As a result, a country with only 1.3 million residents is a close rival to its Nordic neighbours. So, what is the story behind the success of Estonia?

The picture shows statistics of digital economy and society
Picture 1: Digital Economy and Society Index (DESI) 2017

eGovernment services of digitalization

As we can see eGovernment services in the EU 2016, online public these days are becoming easier to use in the whole Europe. To illustrate, 81% of data now digitalized, available online. One of the important things of Estonia’s success, for instance, is the creation of e-Estonia. A long movement by the government whose goal is to combine person interactions with the state using many electronic solutions. Such as e-Residency, e-School, e-Tax, i-Voting and many others. Estonia has received worldwide recognition as a digitalization community of people. And often believed as one of the most technologically smart communities in the world.

So, by using different parts of integrated e-services, Estonia has become a better functioning state. By helping its people to save a great amount of time and energy in everyday life. For example, people of Estonia don’t have to worry about spending hours in a line while waiting for a doctor or in voting. Instead, a prescription for medicine can buy online. The same as participating in elections is possible online, regardless of your location. All you have to do is check your identity using an ID card.

As well as, people in charge of Estonia spent many years trying to find out the best way for exchanging important data. As the years went by, in 2014 Estonia shocked the world by the first country to offer e-Residency. It is a transnational identity available to anyone, despite their location. As referred to e-estonia.com homepage, e-Residency offers to every world person a government-issued digital identity. As well as, the opportunity to run a trusted company online, freeing the world’s entrepreneur.

X-Road is a very important tool or for making integrated e-services in Estonia possible. It was designed already back in 2001. And ever since then has been constantly improved. X-Road is important between diverse databases. Therefore, making all kinds of data easily accessible by the people in charge that approved. In fact, sharing data between countries, not only locally. Now is slowly becoming more and more possible. For instance, Estonia and Finland are linking their electronic health records.

The picture shows network of digitalization
Picture 2: X-Road connecting many databases

Last but not least, Toomas Hendrik Ilves,  president of Estonia, believes that Estonia has one of the cleanest governments in the world. For that people’s trust in the Estonian government is at a high level. Estonia is attracting many small business starters from all over the world. Until now, nearly 6000 e-Residency cards have been given to people in 119 different countries. To sum up, the statistic about the success of Estonia speaks for itself. Making us wonder how a big role in the time history of technology Estonia will play in the following years.



DESI                    Digital Economy                   eGovernment                              e-Residency

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Sharing economy – competition and regulations

In 1995 Pierre Omidyar sold his broken laser pointer for $14.83. This buyer collected broken laser pointers on an online auction site Omidyar created on Labor Day weekend. This auction site later became known as eBay. Today, eBay is a multibillion-dollar business with operations in over 30 countries. As the story suggests, the Internet has become a powerful tool for buyers and sellers to find each other. The latest concept, called “sharing economy”, has been gaining popularity over the last few years. Where Airbnb, eBay, and Uber have been leading examples of to peer-to-peer markets. People rent out their properties, or spare bedroom. Use their vehicle as a taxi in their spare time or even full-time. However, this phenomenon expanded its wings into other markets as well.

While these businesses each specialize in a specific service, they share common and innovative elements. These include intuitive and easy to use websites and mobile apps, lower entry costs for service providers. Rating systems and reviews for the provider and consumer, and competitive pricing are also examples.

invisible hand

Economists around the world agree that to reach efficient markets, it’s necessary to allow the provision of “invisible hand” direction. Plus the demand, which will determine the fair price. The “invisible hand” was originally introduced by the pioneer of the modern economy, Adam Smith (1723-1790). This theory is very simple. A consumer is freely allowed to choose what to buy. Each producer is freely allowed to choose what to sell and how to produce it. So the market will settle the price and quantity of a specific product. Competition brings prices down. And makes the markets more efficient. There are markets and products that can’t implement this theory. Such as infrastructure or in regards to the military. However, markets such as transportation and tourism, it seems that adding competition to the scenario reduces prices.


Competitive pricing clearly benefits the consumers. But how are business owners affected by competition? In June 2014, taxi drivers staged a large-scale protest against Uber. It happened in London, Berlin, Paris and Madrid. They were demanding that banned Uber services. The Finnish taxi drivers have also been demanding to ban the Uber drivers. Whereas the government has in 2016 and early 2017, been working on the legislation. Ended up opening the competition for taxi services. The number of taxi licenses has been regulated in Finland. This result in taxi fares being one of the highest in the world.

On the contrary, across the Gulf of Finland, in Tallinn, Estonia, the government made this competition legal. They were one of the first countries to legalize taxi applications. And from here the competition has prosper. The prices for a taxi ride has been pressed down in Tallinn. And even during busiest hours, there are enough taxis available. Alternately, there are not enough taxis on the streets of Helsinki, during the busiest hours. Due to the over-regulation.

Helsinki taxi companies demanded the government to ban Uber because they feared competition and reduction in fares. Even without specific legislation to restrict people from driving for Uber, the court ruled in favor of taxi drivers. The government fined uber drivers for providing “illegal taxi services”. The result has made potential drivers fearful to enter the market. And the riders in Helsinki continue to pay high prices for their taxi.

Sharing economy- who benefits?

Those who most benefit from the competition are consumers. As the comparison of taxi fares between tallinn and Helsinki showed. But in the sharing economy, those who share their homes or provide ride-sharing services also benefit. The extra income can balance the costs associated with owning a home or driving a car. And can represent a profit for those unemployed or underemployed. It might not be the chosen career path but used as a backup plan to pay bills.

Businesses that started with the “sharing economy” concept are no longer newcomers. The size and scale of that firms have grown a lot. And even surpass some of the world’s largest businesses. The economic impact of these technology-driven firms grows. Many municipalities and regions have accepted change as inevitable. And they really want to facilitate new efficiencies for consumers. Uber, in particular, has made a lot of regulatory headway since 2015.

Airbnb- a crowdfunded project

Despite the lack of regulation, markets sometimes thrive. Like Estonia’s taxi markets.

Berlin has experienced housing shortages for years. Due to a lack of apartments for residents, the city used this reason to ban Airbnb. Banning the shared economy was the only solution they saw in this situation. They started redirecting travelers to hotels, motels, and hostels. Airbnb, in its defense, has drafted its own reports of how the home sharing service benefits local economies.

Regardless of some banned sharing economy platforms, the sharing economy markets are booming. Airbnb’s has grown exponentially since the beginning. From one person’s living-room Bed and Breakfast lodging to a crowdfunded project. And continuing to a million-dollar business. While taxi drivers in Paris and London have been protesting, some European countries have embraced the sharing economy. The Estonian Prime Minister, Taavi Rõivas, pointed out a very important issue with business within sharing economy. He thinks that these business models do not just mean better competition and better service levels. But they may also become a part of the solution to Estonia’s sparse population issue. As well as incentive more people to become entrepreneurs.

Sharing Economy - share your apartment

Furthermore, the sharing economy in Estonia has been growing within the past years. It reached 40.3 million euros in 2016 and the turnover has grown by 7.5% from last year. The number of platforms has doubled. According to Technopolis Group and Ernst & Young’s survey, the sharing economy would quadruple by 2020. The biggest growth in Estonia, however, has been the accommodation and financial service sectors. The number of people working in the field has grown, which has opened more opportunities to Estonians.

Why now?

So, why are the peer-to-peer markets flourishing now and not decades ago? The technological advances play a big part. Such as the increased use of smartphones and their falling costs. The rising capabilities of the Internet. This is only part of the story. The second part of success seems to be behind industry. As well as academic experience in the design and management of online marketplaces.

The popularity of sharing economy has gained a lot of attention. Not just in the small communities but also worldwide. Additionally, the concern of safety has been discussed. The governments must regulate the sharing economy regarding security issues. However, background checks verify safety and riders, drivers and hosts are rating each other. Airbnb post the reviews on their website, which can link to a person’s Facebook page. The risk of getting a bad review and it being posted on Facebook tends to keep consumer and provider well behaved. And eager to please. While some regulation may be necessary, it shouldn’t be a form of protectionism. Mostly for companies that thrive in over-regulated markets. On the contrary, governments should seek to deregulate markets in ways that benefit the public.

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Horton & Zeckhauser      The European Parliament       Journalist’s Resource       Forbes


How to Become a Pioneer in Social Media Management?

Social interaction without the presence of the Internet playing at least a small role in it can be difficult these days. Why has social media taken over our free time as well as work time and what makes social media management so valuable – is it all about keeping pace with changing trends or pervasive need for availability? In any case, social media management can be vitally important for both, managers and employees. A far-reaching and interconnected network of information and contacts can be a powerful weapon or a gold mine.

In the following article, we take a look at an interview with Reid Hoffman, one of the co-founders of LinkedIn, now a representative of this business social network service as an executive chairman. Some of you are already familiar with this name, others surely placed in bewilderment. Mr Hoffman is a man who is capable of miracles in the field of networking and there is a great amount we can learn from him.

On the skin of an extraordinary social media man

Let’s familiarize ourselves with who this extraordinary man is. As mentioned ahead, he was one of the pioneers who founded the social network platform assigned for businesses that has become known to everyone as LinkedIn. He is a pioneer in this field as much as his thoughts were breakthroughs in the years ´93 and ´94; in this period there were not many opportunities when it comes to online networking, so this idea was evolving hand-in-hand with the Internet and people’s ability to use it.

This picture shows social media manager Reid Hoffman

“An entrepreneur is someone who jumps off a cliff, and builds a plane on his way down.”

(Reid Hoffman)

Basically, the social servers and social management tools set for a purpose. And the purpose changes with time and as technologies evolve. What is the key to success with social media, how can somebody see, or better foresee demand and its adaptation in the next few years? It all starts with networking. Next, we will bore into some extracts from an interview made by Khan Academy. Letter K stands for a founder of this educational server, Salman Khan, whereas letter R represents Khan’s interviewee Reid Hoffman.

The thoughts

K:  And this was the first social network idea. And then you’re next couple of roles were exploring that space.

R: Yes, well I’ve always been, and I think this is true of many entrepreneurs, and I actually still by this point would never dream that the word entrepreneur applied to me, was that they have some vision for how technology or product or the way the world can be a problem solved. And for me it was this question of “How are we better as individuals and as a society?” “How do we move forward?” And so, all of the social dynamics of what is called “online” or “online systems” like for example, “What is your identity?” “How do you post pictures?” In which way you find other people?” “How do you communicate with them?” “How do you work with them?” All of these things were kind of key. And so I knew that’s what I wanted to be doing and I wanted to be pulling up experience…”

5 Steps to success social media management

After reading of these brainstorming and thought-provoking words of Mr Hoffman, you should have an inclination of the whole idea. The mistake that people make is to think that LinkedIn is just sharing information on the server. And they think that maybe one day somebody will see and contact you, and offer you your dream job. Time to wake up!

We monitored and evaluated on every particular step we make online. Regardless of whether it is true or not, we should be careful about what we share online in social media. There is a risk that a single social media update turns into a bottomless well under your feet. Likewise, there is a possibility the same update shows your mature opinion and indicates your strengths in communication. It happens through reactions on various articles or shared pictures.

We must admit that to keep pace with modern technology is not always easy. There are plenty of publications instructing you on how to successfully navigate your way through the Internet. With the result of landing a dream job or widening your professional network, Reid Hoffman among them. If you do not have time to read publication you could simply keep in mind these five key points:

Plan ahead:

Write down all your ideas for social media posts. Make a weekly or a monthly plan of posts and keep in mind holidays, like Mothers’ Day or Halloween, and incorporate them into your updates. You might also want to spend a minute or two on considering what sorts of reactions your update might awaken and plan ahead some good responses for different scenarios.

Identify your focus platforms:

What is the target group of your business? What is the industry you would like to get involved with? Keep such things in mind when creating social media updates. Also, think about which social media platforms are then the most beneficial for you. There is no point spending time on showing up everywhere if your target group not involved in Snapchat, for example.

Take lots of photos:

People – visual creatures and even you not interested in art, the eye gets caught by pictures rather than plain text. Rather than using ready-made pictures searched from online we recommend photos taken by you or someone known in social media. Take a bunch of photos once in a few months and you have plenty to go with.

Set aside time to engage:

It is not enough to just post updates online, you must also be active yourself. Have an hour a day to check your social media channels and answer to the commentators. Show people that you are active and available. This is an easy way to increase your visibility and connect with your interest groups.


Be alert and ready for ideas and inspiration all the time and everywhere. If you see an advertisement on TV or on the street that causes a reaction you to write it down. What was the reaction and why? Is this a reaction you want to avoid or use in your social media channels? How could you achieve it? Also, be open and ask your co-workers and employees what their thoughts have been about the previous social media updates. Plan together, fresh ideas and different ways of looking at things can never hurt.

The image shows social media network shceme

“The fastest way to change yourself is to hang out with people who are already the way you want to be.” (Reid Hoffman)

social media – Get in the game

There are plenty of companies offering social media management. That you would not have to spend time on it yourself. But before you go for the seemingly easy option, ask yourself is it really worth it? How could this international company know your company in any other way than a part of the grey mass they serve in a routine manner? Is there a benefit at the end of your social media channel had a more intimate overlook of the company? Could that be your competitive edge?

Whether you hire a company to look after your social media management or you take care of it yourself the fact remains that social media is a major platform and player. And if you want to succeed you need to be there. Keep in mind that social media is a delicate instrument. One tiny step to the wrong direction can have massive consequences. Reid Hoffman notes that he abounds a strong social conscience. That sources from education and interest in history, sociology, and human psychology. He was able to connect the needs of ordinary people with an incredibly difficult mechanism of entrepreneurship and business. Even if his business is not related to yours his story is an inspirational one. And that is what social media is all about eventually: inspiration.

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