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'Our Government Is More Innovative', Der Spiegel

'Our Government Is More Innovative', Der Spiegel © Der Spiegel

24.04.2019

The tiny Baltic nation of Estonia is a digital trailblazer. All public services are available online, saving the country millions of euros each year. President Kersti Kaljulaid spoke to DER SPIEGEL about Estonia's burgeoning IT industry, the free market and the perils of cyberwarfare.

In Estonia, public administration is completely digitalized. Residents can pay their taxes, register their cars and even set up a company online. It's not only convenient -- the country also saves around 2 percent of its gross domestic product by eliminating bureaucratic costs.

One person who has played a central role in Estonia's embrace of technology is President Kersti Kaljulaid. Now 49, she was only 46 at the time of her election, making her Estonia's youngest-ever head of state. Before taking office, she worked at the European Court of Auditors for 13 years. She also worked for a bank and a telecommunications group, and occasionally hosted a radio show.

DER SPIEGEL: Ms. Kaljulaid, Estonia, with its 1.3 million inhabitants, has given rise to four young companies worth more than a billion dollars each. Germany is 60 times larger, but at the moment, it only has nine such so-called unicorns ...

Kaljulaid: With all due respect, our benchmark is not Germany, but rather San Francisco and the Bay Area. And even in this comparison, we can be proud of our per capita figures.

DER SPIEGEL: Are Estonian entrepreneurs simply more creative?

Kaljulaid: The difference is less the creativity of the entrepreneurs. Our government is more innovative.

DER SPIEGEL: That sounds like the "active industrial policy" that German Economics Minister Peter Altmaier wants to pursue. Should the state ensure innovation?

Kaljulaid: Oh no! We Estonians believe in free markets. The government's task is to create a modern legal framework -- the private sector must take care of the rest. The public sector should by no means be a leader in new technologies. Nor can it. This can now be seen even in areas that have long been the domain of the state, such as military technology. They, too, are increasingly being developed by private companies. Google is the world leader in artificial intelligence, far ahead of all government agencies and governments. States cannot do their own research and development, but they must ensure that they can participate in these developments and, where necessary, use them militarily.

DER SPIEGEL: How do you define innovative governance then?

Kaljulaid: I remember the end of the 1990s when I was a consultant to the then-prime minister. As a small and then still very poor country, we realized that our opportunities lay in two megatrends -- IT and genetics. So we set up the Estonian Genome Foundation with startup funding of 3 million euros ($3.3 million) to improve the health of our population and reduce costs. Twenty percent of Estonians will have used our DNA analysis service by the end of this year and know which diseases they are susceptible to and how they can take appropriate precautions. I have an increased risk of Type 2 diabetes, as I know from my analysis. So I will avoid being overweight.

DER SPIEGEL: Countries should focus on accelerating digitalization in their area of responsibility?

Kaljulaid: They even have to if they don't want to become obsolete in the digital world, and they should hurry. In the analog world, it is still the governments that issue passports and identity cards. In the digital world, Facebook and Google are the biggest identity providers. And their customer accounts open up access to further services. But we can't leave the question of digital identity to companies. This is a field that governments must reclaim. And then, there can and should be something like a government app store, where developers offer their own services based on this digital identity.

DER SPIEGEL: Estonia is known as a startup location and a pioneer of modern digital administration. Setting up a company, paying taxes, registering a car, viewing health data -- you can do it all online. How far ahead of Germany are you?

Kaljulaid: It's easy to measure: We introduced our digital ID card in 2000. It then took six to seven years for a critical mass of citizens to use it. In Germany, the introduction of e-passport functions has only recently begun. So we are talking about an interval of almost 20 years. When we started, we would not have dreamed of that. At that time, we thought that a lead of at best three to five years was realistic. We did not expect large economies to allow themselves to fall so far behind in digitalization.

DER SPIEGEL: It wasn't due to a lack of awareness. Back in 2000, then-Chancellor Gerhard Schröder promised Germans they would soon be able to do all important administrative work online. In your opinion, why did this fail?

Kaljulaid: Well, his government implemented the Hartz 4 reforms (Eds: deep cuts to Germany's welfare payments for the long-term unemployed and labor market reforms that are widely credited in the turnaround of the country's economic malaise). That was also innovative action. The other 50 percent probably fell by the wayside. But I see a lot of movement now. Yes, you are behind, but if such a strong and resourceful country really implements a plan decisively, then it will succeed. It's about time.

Interview can be found online here.