Click for the latest ICT developments
When Estonia regained independence in 1991, the government embarked on an ambitious project to bring the nation into the digital age. Estonia premised its IT strategy on providing broad-based connectivity, providing access to technology and information as a right, and on leveraging its human resources to expand economic growth. Today, Estonia boasts one of the most modern telecommunications networks in Europe, low connectivity costs and high rates of computer literacy, even by Western European standards. Twenty-eight percent of Estonia's population is connected to the Internet. Estonia's strategic investment in wiring the entire country has led to an explosion in ICT applications in banking, education, health, transport and public administration. Notwithstanding the recent economic slowdown, Estonia's period of independence has been characterized by significant improvements in living standards, in large measure because of its increased participation in the global network economy. Estonia also has been able to coordinate the efforts of dozens of associations dedicated to furthering the country as a whole, as well as its development as an information society.
Policy: Through a progressive de-monopolization of the telecommunications industry;mostly through the liberalization of the wireless sector;a more aggressive and diversified approach to the advancement of ICT-related solutions has emerged. These varied options;combining wireless, lease lines and fiber-optic networks;allow for a sustained roll out of infrastructure and improved rural connectivity. Cooperation among neighboring countries including Finland, Sweden, and Germany aims at establishing legal and regulatory frameworks for the development of long-distance telecommunications, postal services and broadcasting, consistent with free market economy principles and harmonized with the standards of the European Union.
Infrastructure: Estonia has one of the highest degrees of connectivity in Europe and ranks among the top 20 countries worldwide for teledensity as a result of the tremendous focus placed on the development of a core network infrastructure and provision of access to the general population. This was accomplished through a concession agreement with the Estonian Telephone Company. The company helped to ensure connectivity in rural and scarcely populated areas in return for lucrative urban contracts. The government is actively extending connectivity throughout the nation. By 2002, Estonia will have 300 public Internet access points providing free email and Internet access. These points will also serve as e-government access points where citizens can conduct the majority of their transactions with the public administration. Through another initiative, known as Tiger Leap, all of Estonia's schools have been connected to the Internet. Compared with just 7 percent in 1997, 36 percent of the population now has Internet access, either at home or at work. Estonia has demonstrated how leapfrog technologies can be employed effectively: 40 percent of the Estonian population is already utilizing GSM services. Estonian mobile operators were among the first in the world to introduce WAP services to their customers.
Enterprise: Estonia has placed strong emphasis on reform, embarking on an ambitious program of deregulation and privatization that has made it a highly attractive destination for foreign investors. This has resulted in a rapid transformation to a market economy and substantial inflows of foreign direct investment. Currently, Estonia is one of the largest recipients of foreign direct investment in Central and Eastern Europe;ranking third in investment per capita behind Hungary and the Czech Republic.
Estonia has become a country where mobile phones are not only used, but manufactured. To gain access to both global and local markets, Estonia leveraged its location in the Nordic region (gateway between the East and West) and its historically close ties to its Nordic neighbors, who are the world's leaders in the use and manufacturing of new information technology products. This enabled the country to integrate itself into the supply chains of its Scandinavian counterparts as an initial step to gaining access to the international market. This coordinated effort has also helped Estonia to develop its national infrastructure. Local entrepreneurship, which is also helping to grow the Estonian economy, has already produced some major new companies, including Microlink, the largest IT company in the Baltic states. However, lack of capital is still a significant barrier to local enterprise and wealth creation.
Human Capacity: Emphasis on building a strong education system has been a critical success factor in Estonia's development. The country now boasts a highly educated and skilled workforce, with nearly 45 percent of all citizens pursuing tertiary education. To meet the demand of the growing ICT workforce and to provide an ample supply of knowledge workers, a strong emphasis has been placed on ensuring that university curricula adequately prepare students with relevant and practical skills. This has resulted in technology users who are highly adaptable to technology change. As a result of the Tiger Leap initiative, the generation of Estonians now in school will be 100 percent computer literate. Teachers are enthusiastically reporting that students are highly motivated to learn computing, both out of personal interest and because they know it will lead to better job opportunities.
Content and Applications: Estonia's high level of connectivity and ICT use are a direct consequence of the active efforts by players from multiple sectors to provide relevant content and applications. Telecottages, sponsored by regional governments and community groups, are providing rural areas with rich sources of information and opportunities to develop ICT skills and leverage new economic networks. Farmers from the remote island of Hiiumaa are expanding their access to markets by offering their produce on local versions of eBay. The government is introducing smart cards in 2001 to facilitate applications in public administration, hospitals, public transport and public telephones. The Internet is also being used extensively to deploy e-government and e-banking functions: over 280 public services are now available online, and 80 percent of commercial banking transactions are conducted via the Internet.
Strategic Compact: Estonia is a country with limited natural resources that depends heavily on its people and knowledge capital. Progress required coordination and commitment from a broad coalition of stakeholders including government, enterprise, and civil society. In this respect, four strategic levers have been crucial: encouraging ICT providers to support rural development through concession incentives; forging strategic "win-win" agreements with Nordic telecommunications companies; de-politicizing the computerization issue by channeling government investments through an NGO; and a professional and aggressive marketing campaign waged by the government to encourage demand.
Strong presidential vision and leadership has been instrumental in encouraging and coordinating this broad-based commitment. ICT for development strategies are still fairly new, yet with the right leadership, Estonia has achieved significant progress through this approach. The country is effectively increasing use of ICT across a number of sectors, including government and education, rather than simply trying to position for ICT-related production or for outsourcing of ICT services.